Nigeria Prohibits ATM Cash Withdrawals Of Over $225 Per Week To Promote CBDC Use

Zinger Key Points
  • Nigerians cannot withdraw over $45 from ATMs in a day.
  • The Central Bank of Nigeria's restrictions are a part of a larger effort to promote electronic financial transactions.

Nigeria has dramatically curtailed the amount of cash that individuals and businesses can withdraw from ATMs. The move is part of the country's "cash-less Nigeria" strategy and an effort to promote the eNaira, Nigeria's central bank's digital currency (CBDC).

What Happened: On Dec. 6, the Central Bank of Nigeria stated that individuals and businesses would now be restricted to withdrawing no more than $45 (20,000 Nigerian nairas) each day and $225 (100,000 nairas) every week from ATMs.

Additionally, there will be a weekly withdrawal cap for both people and businesses of $225 (100,000 nairas) and $1,125 (500,000 nairas), respectively.

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Any funds taken out in excess of those restrictions would incur a 5% fee for individuals and a 10% cost for businesses.

The daily cap for cash withdrawals from point-of-sale terminals is also $45 (20,000 nairas).

“Customers should be encouraged to use alternative channels (Internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions,” the director of banking supervision Haruna Mustafa said while announcing the changes.

The restrictions are cumulative for each withdrawal, so someone who withdraws $45 from an ATM on the same day and then tries to withdraw money from a bank will be charged a 5% service fee.

Prior to the announcement, the daily cash withdrawal caps for individuals were $338 (150,000 naira) and for companies $1,128 (500,000 naira).

Why It Matters: The eNaira first launched on Oct. 25, 2021. Since then, adoption rates have been poor.

Less than 0.5% of the population reported using the eNaira as of October 25, a year after its inception, indicating that the Central Bank of Nigeria has had difficulty persuading its people to utilize the CBDC.

Nigeria implemented its "cash-less" policy in 2012 with the justification that doing so would improve the efficiency of its payment system, lower the cost of banking services, and increase the efficacy of its monetary policy.

On Oct. 26, Godwin Emefiele, the governor of Nigeria's central bank, stated that 85% of all Naira in circulation was stored outside of banks and that as a result, new banknotes would be issued to promote the transition to digital payments.

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