Over the past few months, Nigerians have not been able to use their naira debit cards to make any foreign transactions of more than 20 dollars in a month.
This reduction which started two years ago was from $500 to $300, then to $100 and now $20.
The reduction was a result of foreign exchange scarcity in Nigeria and the Central Bank of Nigeria’s (CBN) decision to stop the sales of foreign currency to commercial banks.
At the 364th Bankers Committee Meeting in Abuja in 2021, the CBN Governor, Godwin Emefiele disclosed that the apex bank will stop supplying foreign currency to Deposit Money Bank (DMBs) otherwise known as commercial banks by the end of the year. He, therefore, urges them to source for their foreign exchange from export proceeds.
Around February this year, the United Bank of Africa (UBA) notified its customers of the new set international spending limit of $20 on Naira cards. Virtual all banks in Nigeria have since followed suit.
Investors King gathered that the downward review of the dollar transaction limit on Naira debit cards is affecting many small businesses and service providers.
Many small technology business companies are having difficulty paying for subscriptions. A few of them have resorted to either buying virtual dollars at unofficial rates or opening a domiciliary account, which also cost the same as unofficial rates.
Cloud engineers also have similar problems. According to a software engineer, Ola Emmanuel, he stated that “Owing to the restrictions on dollar spending in Nigeria, it’s hard to pay for various utilities online. Some of these include paying for domain purchases and new software, as well as recurring bills. It’s also hard to buy a gadget from an international website due to the restrictions”.
As the scarcity of foreign exchange persists, small businesses will have to rely on other expensive alternatives to meet their dollar obligations, a situation that would further affect their expenses.
