Nigerians, especially those banking with one of the biggest banks in Nigeria, First Bank, yesterday woke up to the news that they will no longer be able to use their Naira Mastercard, Naira Credit Card, Virtual Card and Visa Prepaid Naira Card for international transactions.
This policy will take effect from the 30th September, 2022.
One takeaway from this policy is that the country is virtually running out of forex to finance trading activities. This can be directly linked to the humongous amounts of forex used to subsidize the continued importation of petroleum products.
How did an oil producing nation get to this humbling state?
This new policy is definitely going to affect a lot of small businesses and traders that rely on international trade to support their business. People importing items or having subscriptions will be severly hit.
However, there are several ways to manage the situation.
First, businesses and individuals can use several iterations of Dollar denominated cards including Debit Multicurrency Cards, Prepaid Cards and Credit Cards as a stop gap measure. However, they are limits of $10,000 to the use of such cards.
Secondly, the use of currency swaps where diaspora Nigerians can recieve Naira in their Nigerian accounts while helping businesses or individuals to pay equivalent amounts in foreing currency to offset the Naira payments. This is a more risky method as it is subject to abuse and fraud with little or no recourse.
The business environment in Nigeria is certainly going through tough times. This new policy is certainly not one designed to lighten the burdens faced by businesses and individuals in the country