Some Nigerian banks have imposed limits on the international transactions of its customers. On Wednesday Fidelity Bank stated in an email to customers that the bank had reduced the spending limit on Fidelity Naira Visa and Mastercard to $1000 monthly for international transactions.
“This means your card can be used on POS, Web, and ATM for a cumulative transaction value of up to $1,000 monthly. However, your daily ATM withdrawal limit is pegged at $300.”
In similar lieu, Guaranty Trust Bank (GTB) dispatched mails to its clients and customers, stating that the bank will cut down spending limits on GTBank Naira Mastercard.
“We would like to inform you that the monthly spending limit on your GTBank naira master card has been reviewed from $3,000 to $1,500 for your international online and PoS transactions effective from March 25, 2020.”
Likewise, Zenith Bank adopted a similar measure by setting an international withdrawal limit of $1,000 a month. The bank had also set a daily limit of $300 for withdrawals outside Nigeria.
For over one month, the exchange rate between the United States Dollar and Naira has been fluctuating, with the Naira losing significant value. It went from about $1/N355 to $1/N410. However, the Central bank of Nigeria set a fixed rate of $1/360.
Perhaps, the trend of restrictions on dollar transactions by domestic banks is plausible to Nigeria’s economic challenges (falling oil prices and the COVID-19 pandemic) and strain on Forex availability in the country.
It would be recalled that banks in Nigeria adopted an identical approach in 2015, during the dollar crunch that was triggered by a fall in crude oil prices, which later led the country into an economic recession by 2016.
About a week ago, Zainab Shamsuna Ahmed, Nigeria’s finance minister hinted at a possible recession in the next 6 months if the COVID-19 pandemic persists.
However, the International Monetary Fund already stated that the global economy is already in a recession and sub-Saharan Africa needs a lot of financial attention.
Since it’s still not certain where the Nigerian economy lies, the country is already looking into solutions and measures to bounce back from the pandemic and falling oil prices.
The Vice President of Nigeria, Yemi Osinbajo led a meeting with 7 state governors and the finance Minster on April 1st, 2020, to discuss urgent economic solutions that will benefit Nigerians.