Nigeria: Scarcity - Banks Restrict Forex Spending Abroad

A commercial tricycle operator operating along Tafawa Balewa Square in Lagos Nigeria
19 August 2020

To avoid foreign exchange (forex) settlement risk, some banks have reduced the amount of dollars customers can spend abroad using their debit cards.

This is even as Startimes, a satellite service provider decried forex scarcity for its operation.

The Central Bank of Nigeria (CBN) has reduced its intervention in the domestic forex market due to dollar shortages.

First Bank Plc in a message to our correspondent wrote: "Please be advised that the card spending limit on the First Bank's MasterCard is $500 monthly across the border, which is within 30 days. Thank you for banking with us."

Guarantee Trust Bank also stated: "Dear customer, the monthly spending limit on your @gtbank Naira Mastercard is now $100 for international transactions." On January 4th, the monthly limit was $3000 with a $300 daily withdrawal limit.

Stanbic IBTC had advised it would cut spending limit by half to $500 monthly from Monday and would limit cash withdrawals to $100.

Zenith Bank said it will temporarily suspend the use of debit cards abroad for cash withdrawals and cut the monthly spending limit abroad by more than half to $200. It had earlier set $1,000 month withdrawal abroad.

Ecobank and Fidelity Bank - have also lowered withdrawal limits for individuals while abroad.

The CEO, of Star Times, David Wang, while speaking before the House Adhoc Committee investigating the non-implementation of Pay-As-You-Watch services by Multichoice and other providers said: "Most of the equipment are not manufactured and scarcity of dollar and euro at official rate has increased our cost of operations. Sometimes, you get a dollar between N450 and N480 naira."

Chairman of the Ad-hoc Committee, Unyime Idem said increment on satellite services of between 30 and 31 percent was not tenable.

"We will give you some time to go back to the management and look at the increment as it relates to the 2.5 percent VAT increment, then come back to the committee. What you have done is between 30 and 31 percent. But for this particular increase, we will not accept it."

The CBN is yet to resume forex sales to retail currency traders after it banned international travel as part of a lockdown measure to slow the spread of the coronavirus.

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