Starting March 1, 2025, Nigerians won’t need to worry about saving money, because their banks will be doing the saving for them—one ATM withdrawal at a time—just that you can never access the funds. Sounds like a well-planned heist, right? Except this one is perfectly legal.

Nigerians will now be paying through their noses just to access their own funds, thanks to the Central Bank of Nigeria’s (CBN) latest policy blessing the banks with a multi-trillion-naira windfall in ATM charges. 

Let’s break it down.

The Billion-Naira Cash Grab Disguised as Policy

Under the new policy:

• On-Us Transactions: Withdrawals at your bank’s ATM? Free. (Phew.)
• Not-On-Us Transactions: Withdraw at another bank’s ATM? That’ll be ₦100 per ₦20,000.
• Off-Site ATMs: Withdraw from an ATM that isn’t inside a bank? That’s ₦100 per ₦20,000 withdrawal, plus a surcharge of up to ₦500.
• International Withdrawals: Fees are “based on cost recovery,” meaning whatever the international acquirer charges will be passed directly to you.

At first glance, ₦100 per withdrawal doesn’t seem like much—until you do the math.

How Banks Will Make ₦2.2 Trillion from Your Money

…and that’s just based on one withdrawal per active account a month

With 311.6 million active bank accounts in Nigeria, even a single monthly withdrawal per account could generate huge profits:

• Domestic Withdrawals: ₦100 x 311.6 million = ₦31.16 billion per month.
• Off-Site ATM Withdrawals: ₦600 per withdrawal x 311.6 million = ₦186.96 billion per month.

That’s over ₦2.2 trillion per year—not from lending, not from business investments, but simply from letting people access their own money.

And all this in an economy where inflation is running at over 30%, unemployment is skyrocketing, and the new ₦70,000 minimum wage barely covers rent and food.

If a worker withdraws ₦80,000 in a month from off-site ATMs, they could pay up to ₦2,000 in fees—nearly 3% of their salary. Meanwhile, banks continue to report record profits.

From Banking to Legalised Extortion

Globally, banks earn primarily from lending. But in Nigeria, financial institutions have found a more innovative model: charging customers for every financial move they make.

• In the first quarter of 2024, top-tier banks raked in over ₦125 billion from electronic banking charges.
• With just 16,714 ATMs for over 200 million Nigerians, long queues and machine downtime are already the norm. This policy will push more people towards expensive PoS withdrawals, where agents also charge their own fees.
• By contrast, in countries like Kenya, digital banking is encouraged through zero ATM withdrawal fees for many account types. Even in South Africa, withdrawal charges are significantly lower. So why are Nigerian banks making their customers pay so much for basic services?

The CBN claims these charges will prevent customers from breaking withdrawals into smaller amounts. But let’s be honest: This is just another revenue stream for banks, cleverly wrapped in the language of “financial policy.”

The Central Bank of Nigeria, rather than acting as a regulator in the interest of financial inclusion, seems to be tilting towards policies that favour banks at the expense of customers. 

The question is: why is there no cap on ATM charges? Why isn’t there a push for alternative, low-cost cash withdrawal solutions?

I mean! There is no upper limit or maximum limit on the charges for ATM transactions. The fees can vary and may increase based on different factors, such as the amount of money withdrawn or the location of the ATM. Essentially, there is no fixed maximum charge that customers can be guaranteed not to exceed. 

This means you might encounter different fees depending on which bank’s ATM you use or whether the ATM is located on-site (at a bank branch) or off-site (at a different location, like a shopping mall). 

Moving Towards Digital, or Just Financial Exclusion?

Supporters say that higher ATM fees will encourage electronic transactions—but here’s the problem:

• Digital Payments Are Not Universal: Many Nigerians, especially in rural areas, still rely on cash for daily transactions.
• Mobile Network Issues: Failed transfers and delayed alerts are common, making cash a safer option for many.
• Unbanked Population: With 26% of Nigerians still unbanked, these charges could further discourage financial inclusion.

So, what’s the alternative? Fintechs like Opay, PalmPay, and Kuda may benefit as Nigerians search for less exploitative banking options. But until digital banking becomes truly reliable, these ATM charges are nothing short of a tax on poverty.

So, Who Will Save Nigerians from Their Own Banks?

As it stands, the biggest threat to your finances isn’t inflation, unemployment, or even government policy—it’s your own bank.

At what point does banking stop being a service and start looking like state-approved extortion? Nigerians are being charged simply for existing within the banking system.

If the CBN does not cap these fees or introduce customer-friendly alternatives, we may soon see a mass exodus from traditional banking. The very institutions meant to safeguard our money seem more interested in finding new ways to take it—so as to “ease costs of operations.”

Until then, be prepared: In Nigeria, it now costs money to withdraw your own money.

The post ANALYSIS: Banks to Rake in N2.2 Trillion Annually from ATM New Charges appeared first on Tech | Business | Economy.

When Musa needed a loan to expand his small electronics shop, he easily applied online and received the funds within hours. His access to financial services has allowed him to grow his business, support his family, and plan for the future.

In contrast, Amina lives in a rural village in northern Ghana. Her daily life is far more constrained.

When she sells her goods at the local market, her earnings are stored in cash, leaving her vulnerable to theft or loss. She has no formal safety net if her child gets sick or her crops fail.

Amina cannot save effectively or borrow to invest in her farm without access to a bank or mobile money services.

Her financial world is limited by geography and the lack of infrastructure that connects her to the wider economy.

These two lives, separated by a few hundred kilometers, illustrate Africa’s stark financial access divide. While city dwellers like Musa benefit from modern financial services, millions of rural Africans like Amina remain excluded from the formal financial system.

This gap in access is a barrier not only to individual prosperity but also to the overall economic development of the continent.

Globally, about 1.4 billion adults remain unbanked, with Africa home to a significant portion of this population.

Financial exclusion is even more pronounced in Africa, where over 60% of the adult population cannot access basic financial services such as savings, credit, or insurance.

The unbanked are often cut off from participating in the formal economy, unable to build wealth or fully engage in economic activities.

The exclusion stems from a lack of accessible financial infrastructure, insufficient literacy, and geographical barriers. For instance, in many rural parts of Africa, bank branches are scarce or non-existent, making it nearly impossible for individuals to open accounts, apply for loans, or even make basic transactions.

How Mobile Technology is Closing the Gap

In recent years, mobile technology has dramatically changed the financial landscape in Africa. Mobile money platforms like M-Pesa in Kenya and MTN Mobile Money in West Africa have made it possible for millions to transfer money, save, and even access loans and insurance services without needing a traditional bank account.

As of 2022, over 350 million people in sub-Saharan Africa were using mobile money services, representing more than 60% of the world’s mobile money transactions.

These platforms have effectively extended the reach of financial services to the previously unbanked, particularly in rural and underserved areas.

With mobile money, people can receive remittances from family members abroad, pay school fees, start small businesses, and gain access to basic health insurance.

This innovation has allowed for a more inclusive financial system, reducing barriers for those traditionally marginalized by banks.

However, while mobile players have made significant strides, the cost of infrastructure and regulatory limitations still pose challenges.

Despite the advances in mobile financial inclusion, the cost of building and maintaining infrastructure continues to leave millions excluded. In countries with vast rural populations and weak infrastructure, setting up physical banking services or even mobile money networks can be prohibitively expensive.

Network providers face high costs to extend their reach into remote areas where populations are sparse and incomes are low.

Without government subsidies or incentives, there is little business case for expanding financial services into these regions. Consequently, many are left reliant on informal financial systems, which are often insecure and inefficient.

Additionally, the digital divide exacerbates financial exclusion. Even though mobile technology is widely adopted, there is still a gap in smartphone ownership and internet access, further limiting access to more advanced financial services that require smartphones or mobile apps.

A Path Toward Broader Financial Inclusion

One potential solution to these challenges lies in white labeling. White labeling is when a product or service is created by one company but rebranded and distributed by another.

In the context of financial inclusion, white-label banking solutions can allow local trusted entities—such as cooperatives, community groups, or even telecom companies—to offer financial services without having to build the technology or infrastructure themselves.

Leveraging existing trust networks in local communities is far more effective than relying solely on large financial institutions or fintech companies to close the gap.

Instead of creating a few large companies that dominate the financial landscape, white-label services can be distributed more broadly, allowing smaller entities to reach deeper into rural areas and marginalized populations.

For example, community-based savings groups in rural areas could use a white-label mobile banking platform to offer their members savings accounts, loans, and insurance, tapping into a network that already has the trust and engagement of the local population.

This type of solution would drastically reduce the cost and complexity of providing financial services to the underserved.

Greater Access Benefits All

The economic benefits of financial inclusion are significant, both for individuals and for the economy as a whole.

For individuals, access to financial services enables savings, investment, and risk management. With the ability to save, people can build up capital over time, which they can then invest in starting businesses, buying property, or funding education.

Access to credit allows individuals and small businesses to smooth cash flow and seize growth opportunities, while insurance helps people manage risks and recover from financial shocks.

At a macroeconomic level, financial inclusion stimulates economic growth. By bringing more people into the formal economy, financial inclusion increases the flow of capital, boosts consumption, and creates jobs.

According to research by the International Monetary Fund (IMF), countries with higher levels of financial inclusion tend to have higher GDP growth rates.

A World Bank report noted that countries with broad financial inclusion enjoy lower poverty rates and less income inequality.

For Africa, where small and medium-sized enterprises (SMEs) contribute up to 90% of all businesses and more than 50% of employment, access to finance is essential for unlocking growth potential and driving economic development.

Furthermore, financial inclusion enhances financial stability by spreading financial risk across a broader section of the population and economy.

When more people and businesses are included in the formal financial system, the economy becomes more resilient to shocks like natural disasters or financial crises.

This is because formal financial institutions are better equipped to manage risk than informal lenders or unregulated markets.

Financial inclusion is not just a moral imperative; it’s an economic necessity. By ensuring that everyone, regardless of income or geography, has access to financial services, we can create wealth at the individual level and stimulate economic growth at the national level.

While mobile technology has made significant progress in closing the financial inclusion gap, there is still much work to be done.

High infrastructure costs and the digital divide continue to leave many excluded, but innovative solutions like white labeling offer a promising path forward.

By leveraging existing trust networks and local institutions, we can bring financial services to even the most remote corners of Africa and unlock the continent’s full economic potential.

Ultimately, greater financial inclusion will benefit not just individuals but also the broader economy, creating a virtuous cycle of growth, wealth creation, and prosperity.

*Ajibola Awojobi is the founder of BorderPal

The post Lowering Infrastructure Costs Key to Boosting Financial Inclusion In Africa appeared first on Tech | Business | Economy.