Nigeria Limits ATM Withdrawals to Promote Digital Payments

Nigeria's New ATM Withdrawal Limits

Nigeria's Central Bank has introduced significant changes to ATM withdrawal limits, aiming to transition the nation towards digital payments. Individuals can now withdraw a maximum of ₦20,000, approximately $45, per day, with weekly limits set at ₦100,000 ($225). Corporations face a weekly cap of ₦500,000 ($1,125). Exceeding these limits incurs a 5% fee for individuals and 10% for businesses.

Encouraging Digital Payment Adoption

The Central Bank of Nigeria is actively promoting digital payment methods, including the eNaira, its Central Bank Digital Currency (CBDC). The initiative aims to enhance financial inclusion, reduce corruption, and facilitate remittances. Despite mixed results, the government remains committed to integrating digital transactions into everyday life.

The Role of eNaira

Although only a small fraction of Nigerians currently use eNaira, it is central to the country's digital strategy. Previous incentives included discounts for motorized rickshaw passengers. The eNaira, launched in October 2021, positions Nigeria among a select few countries globally to implement a CBDC on a national scale.

Broader Implications and Criticisms

Nigeria's shift towards digital payments reflects broader economic goals. As Africa's largest economy with a significant informal sector, the move could broaden the tax base and formalize more of the economy. However, there are concerns about potential government overreach and surveillance capabilities inherent in CBDC technology. Despite these concerns, Nigeria's approach may influence other nations to adopt similar digital currencies.