The Naira redesign has been followed by a period where everyone is now forced to utilize digital transactions, but the lack of ATM cash dispense and even the mobile banking apps built on convenience factor are disrupted by poor network connectivity, leaving people often stranded.
As a result, ATMs are becoming fewer, and those that are available often run out of cash with little warning. The few that dispense cash are always crowded and lots of people don’t mind as POS vendors have parachuted their prices; you now use money to collect money – way beyond the initial N100 for N5,000 and below.
Bank transfers are expensive and slow, while app downloads are high pending issues with connectivity in most parts of the country.
In the past few years, Nigeria has seen an increase in the number of mobile money leverage but the few days following the naira redesign and disposal of old notes has seen an even higher increase in this aspect.
E-payment transactions in Nigeria hit a monthly all-time high of N33.2 trillion in August 2022. By November of the same year, there was a 145% surge.
Total transaction value in the Digital Payments segment was projected by Statista to reach $14.25 billion in 2023 — but it has gone beyond this following the naira redesign.
However, the recent hiccups put together have placed a spotlight on the lack of an efficient banking system in the country.
Connecting this to sustainability and resilience, an adequate banking system should be able to withstand stress irrespective of the situation that comes up. This just explains that we have a lot of work to do in the sector.
A lot of Nigerians are complaining about the poor working of ATM networks in Nigeria. They say that if you don’t have enough money, it is difficult to get access to your own money – reference to the exorbitant prices placed on cash withdrawals. If you can’t make a transfer, it is difficult for anyone to spend their money.
The success or failure of reforms depends on whether they can be put into practice. The Naira redesign is a good example of this; it has been implemented with some difficulty, but it shows that Nigeria’s banking system needs to put in more effort.
Nigeria’s banking system is not completely broken, but it could be better. A lot needs to be done to improve the network, make it more accessible, bring down costs, increase efficiency and transparency, as well as help people get access to their own money.