Nigerians unhappy with central bank restrictions on using local debit cards abroad

Many Nigerians are unhappy over the country’s central bank decision to limit the amount that can be withdrawn using a local debit card abroad to just 20 US dollars.

The Central Bank of Nigeria (CBN) said it implemented the directive in an attempt to conserve the country’s dollar reserves by limiting the foreign currency settlement risk.

A photo of a person counting Nigerian currency notes. /CGTN

Some Nigerians who engage in international travel said the policy is adversely affecting them.

One example is Lengdung Tungchama, a digital communication expert, who said the new limit on his Naira debit card left him stranded without cash during one of his trips.

“Last week I was in Cameroon and I got involved in so many things and I ran out of money completely. The money I needed to get back home was about 100 dollars, and the limit was 20 dollars. My card refused to work, so how was I supposed to get home?”

According to the CBN, its dollar reserve declined by 19 percent from last year and the country has suffered a fourth straight monthly drop in the reserve levels despite a rise in global crude oil prices.

Nigerians are no longer spending more than 20 US dollars via ATM transactions and other forms of payment while out of the country, according to a new directive by the country’s central bank. /CGTN

The CBN has assured the public that it is working to increase the foreign reserves and aims to surpass a 42 billion dollar threshold by mid this year.

However, some economic analysts argue the problems stem in part from Nigeria’s over-reliance on crude oil and the effects of the coronavirus pandemic.

While the government has pledged to boost local production of goods in the country and strengthen the Naira in global markets, some economic experts insisted the government must diversify the economy for things to improve.

“The fall in the price of oil globally has really impacted ways Nigerians, COVID came as well and it has messed up the reserves…they are trying to come up with where you cannot continue to extract these hard currencies and use out there, rather they are trying to see how we can be able to get as much as we can in here,” Amama Benedict, a digital marketing consultant said.

The CBN said limiting spending on Naira debit cards to just 20 dollars is simply one way to address the problem. Other experts, like Amama Benedict, believe the CBN’s directive will help address dollar shortages in the country, improve the value of the Naira and Nigeria’s reserves abroad.

“Nigeria is one of the oil producing countries in the world, and if we can be able to find a way to be able to make people start doing things using our local currency, I’m telling you that our currency will continue to go high up there,” Benedict noted.

(Story compiled with assistance from wire reports)