Electronic payment hits N38.77trn in January

  • Up by 45.52% YoY, highest in NIBSS’ history

The naira redesign and cashless policies of the Central Bank of Nigeria have started gaining traction despite the initial shocks on the economy. There are indications that Nigerians are gradually embracing the electronic options to settle business transactions as data obtained from Nigeria Inter-Bank Settlement System in January showed that instant electronic payment increased to N38.77 trillion, representing a 45.52 percent year-on-year growth. BAMIDELE FAMOOFO reports.

Uba Group

Data obtained from NIBSS showed that Africa’s largest economy recorded a quantum leap in instant electronic payment in January, growing by about 46 percent from N26.65 trillion in January 2022 to about N38.77 trillion in 2023.

The recorded figure for Nigeria Instant Payment System in January 2023 (N38.77tn) is the highest on record for the month of January on the NIBSS portal.

While instant payment increased by 45.52 per cent y-o-y, it fell by 7.75 per cent month-onmonth from N42.03 trillion in December 2022 to N38.77 trillion as of January 2023. Based on NIBSS data, December usually records the highest transaction volumes and figures because of the yuletide season.

Analysts have suggested that the outcome in January 2023 is a possible indication that the goal of the Central Bank of Nigeria to migrate the country into a cashless economy is indeed achievable with the right necessary payment infrastructure in place. In 2022, the CBN announced a naira redesign policy, withdrawal limits, and encouraged Nigerians to adopt electronic forms of transactions.

To discourage the continuation of cash transactions, CBN said the maximum weekly limit for cash withdrawals across all channels by individuals and corporate organisations shall be N500, 000 and N5 million respectively. CBN in response to popular demand increased cash withdrawal limits from N100, 000 and N500, 000 which was previously announced on December 6, 2022 for both individuals and corporates respectively.


CBN recommended that customers should be encouraged to use alternative channels (Internet banking, mobile banking apps, USSD, cards/POS, eNaira) to conduct their banking transactions. According to the CBN, the use of cash payments will reduce in the country by 2025.

It stated this in its Payments Vision 2025 document. It explained that by 2025, the country will have a cashless and efficient electronic payment system infrastructure to service all sectors of the economy.

It said, “The use of cash will naturally slow with the ‘mobile first generation’, which will be economically active by 2025, hence one of the focuses of the PSV 2025 is enhancing the cashless policy of the CBN”, the document stated.

“As we implement the PSV 2025 agenda, the CBN will continue to ensure that the Nigerian payments system is widely utilised domestically, supports the government’s financial inclusion objectives, and meets international standards while contributing to overall national economic growth and development of Nigeria.”


According to the Governor of the CBN, Godwin Emefiele, the Naira redesign policy would bring sanity into the financial system, helping the apex bank to regain control of the monetary system which obviously it lost sometime around 2015. The head of Nigeria’s fiscal policy lamented that about 85 percent of the currency in circulation in the country was outside his control (not within the banking system).

“This is even as currency in circulation more than doubled from N1.46 trillion in December. 2015 to N3.23 trillion in September 2022; a worrisome trend that must be curbed,” said Emefiele. Besides taking back the cash outside the banking system which does not directly benefit the economy, the Central Bank said it has resolved to be aware of its responsibility in line with the global best practice to undertake currency redesign every 5–8 years.

Selling the agenda to top bankers and key stakeholders of the economy at the 2022 edition of the annual dinner of the Chartered Institute of Bankers in Lagos, Emefiele argued that the existing banknotes have remained unchanged in almost 20 years.

“It is therefore no longer tenable to continue with business as usual; especially given the continually evolving circumstances that could impinge the optimal performance of the Naira,” he said. Emefiele definitely got the approval of the executive arm of government for him to be able to carry out the far reaching policy.

Besides the approval of the President, the laws that established the CBN also support the action. “It is against this backdrop and congruent with relevant sections of the CBN Act 2007, that the CBN sought and obtained the approval of President Muhammadu Buhari to redesign the N200, N500, and N1,000 banknotes,” Emefiele emphasised.

Some of the benefits which the twin policy hopes to deliver to the economy, according to Emefiele are: 1. to quicken the attainment of a cashless economy as it is complemented by increased minting of the e-Naira. 2.

To curtail currency outside the banking system and, 3. As monetary policy becomes more efficacious, it helps to rein in inflation. The policy is expected to check currency counterfeiting and also reduce the expenditure on cash management and promote financial inclusion among other benefits.


In the short to medium and long terms, according to Buhari, the policy is expected to strengthen macroeconomic parameters; reduce broad money supply leading to a deceleration of the velocity of money in the economy which should result in less pressures on domestic prices; lower inflation as a result of the accompanying decline in money supply that will slow the pace of inflation; collapse of illegal economic activities which would help to stem corruption and acquisition of money through illegal ways; exchange rate stability; availability of easy loans and lowering of interest rates; and greater visibility and transparency of financial actions translating to efficient enforcement of our anti-money laundering legislations.

After the launch of the new naira notes on December 15, 2022, the CBN urged Nigerians who own bank accounts to visit their respective banks to deposit the affected old naira notes and not to expect the new notes in exchange.

The initial deadline for deposit of the old notes was January 31, 2023, leaving a window of about three months between October 2022 when the policy was announced and the January 31, 2023 deadline.


Before the January deadline, the economy was troubled as economic agents reacted to the shock of the sudden withdrawal of the only familiar means of transacting business that they are used to-cash. Also because the new naira notes are in circulation as envisaged, economic activities witnessed a slowdown as most market women would no longer accept the old naira notes while others also refused to accept electronic payments due to apathy and largely because the banks are not dispensing enough of the new notes while the old ones have also become a scarce commodity.

President Buhari alleged that the troubles Nigerians are going through at the moment is caused by unscrupulous officials in the banking industry, entrusted with the process of implementation of the new monetary policy.


To cater to the needs of rural dwellers that are not covered by banks, the CBN introduced what it called the naira swap programme. It is targeted at helping this class of people to exchange the old naira notes for new notes as opposed to what is obtainable in the urban areas.

Director, Financial Markets Department of CBN, Angela Sere-Ejembi, explained that the programme said the initiative was part of a concerted effort by the apex bank to maximise the channels through which underserved and rural communities could speedily exchange their old Naira notes.

The swap which was done in partnership with super agents and the banks allows a maximum of N 10,000 per person while amounts above N 10,000 may be treated as cash-in deposit into wallets or bank accounts in line with the cashless policy. Other measures taken by the CBN to intervene in the chaos created by the policy was the extension of the deadline for the withdrawal of the notes till February 10.

Those who are not able to deposit the old notes are encouraged to deposit them directly with the CBN beyond the expiration of the deadline. To stem this tide, Buhari directed the CBN to deploy all legitimate resources and legal means to ensure that our citizens are adequately educated on the policy; enjoy easy access to cash withdrawal through availability of appropriate amounts of currency; and ability to make deposits.

“I have similarly directed that the CBN should intensify collaboration with anti-corruption agencies, so as to ensure that any institution or person(s) found to have impeded or sabotaged the implementation should be made to bear the full weight of the law,” he said.

To further ease the money supply pressures, Buhari on Thursday, also gave approval to the CBN that the old N200 bank notes be released back into circulation and that it should also be allowed to circulate as legal tender with the new N200, N500, and N1000 banknotes for 60 days from February 10, 2023, to April 10, 2023, when the old N200 notes cease to be legal tender. GAINS SO FAR President Buhari, in a state broadcast on Thursday acknowledged that the naira redesign policy recorded initial setbacks, causing untold hardship for the people.

Meanwhile, he said the evaluation and feedback mechanism set up has revealed that gains have emerged from the policy initiative. “I have been reliably informed that since the commencement of this programme, about N2.1 trillion out of the banknotes previously held outside the banking system, had been successfully retrieved.

This represents about 80% of such funds,” he said. The CBN also claimed that the rate of kidnapping has recorded a significant decrease since the policy was introduced, noting that it has become a disincentive for those who engage in the business to collect ransom.


The Chief Economic Adviser to the President, Doyin Salami, has advised President Muhammadu Buhari to approve further extension of the deadline of the cessation of the use of old notes. He also recommended to the CBN to increase the volume of the new naira notes in circulation to N2 trillion for the economy to function properly.

Salami warned that inadequate supply and distribution of currency notes will lead to a slowdown, more likely shrinkage of the economy, leading to rise in unemployment. He argued that worsening economic conditions created by this policy will continue to impoverish Nigerians.

The economics lecturer at the Lagos Business School faulted the capacity of the Nigeria Security Printing and Minting Company to print adequate volume of the newly redesigned notes. Muda Yusuf, Economist and Chief Executive Officer, Centre for the Promotion of Private Enterprise, is concerned that the failure to extend the deadline for the currency swap could put the N100 trillion component of the national GDP at risk.

He noted that the two critical sectors that are particularly vulnerable are trade and commerce; and agriculture. “The crippling of business transactions at the distributive trade end amid the currency swap crisis would not only undermine the trade and agricultural sectors but would have a knock-on effect on the manufacturing value chain and the services sectors,” Yusuf said. Explaining the basis of his argument, he said, “This is because whatever is produced must be sold. The trading end of the chain has been greatly disrupted by this currency swap crisis.