After years of tight restrictions caused by dollar shortages and foreign exchange instability, Nigerian banks have resumed international transactions on naira-denominated debit cards — a major milestone that signals renewed confidence in the country’s economy.
This breakthrough is one of the most visible signs yet that the Central Bank of Nigeria’s (CBN) reforms under Governor Olayemi Cardoso are working.
The decision by several leading banks — including United Bank for Africa (UBA), FirstBank, Guaranty Trust Bank (GTBank), and Wema Bank — to re-enable global card usage represents a tangible improvement in the country’s foreign exchange liquidity.
More than just a financial development, it reflects a broader shift toward economic normalisation after years of policy inconsistencies, dual exchange rates, and scarcity of dollars in the formal market.
For consumers, students, travelers, small businesses, and tech-savvy entrepreneurs who depend on international payments for services, subscriptions, shopping, or business tools, this is a welcome relief.
The long freeze
In 2020, Nigerian banks began restricting the use of naira cards for international transactions.
The move was triggered by a severe scarcity of foreign exchange inflows, worsened by the global COVID-19 pandemic, oil price shocks, and an increasingly unpredictable forex management system.
As reserves dwindled and the CBN struggled to meet forex obligations, many banks simply suspended dollar access via naira cards. Those who needed to pay for goods and services abroad — from Netflix to Amazon, Spotify, Zoom, or Udemy — were forced to open domiciliary accounts and source foreign currency from the volatile and often exploitative parallel market.
Eventually, some banks imposed ultra-low spending limits — as little as $20 to $100 per month — while others halted all cross-border transactions unless funded with actual dollar deposits. This created significant hardship, especially for tech professionals, students studying abroad, frequent travelers, and SMEs engaged in global commerce.
A turning point
The tide began to turn in 2023 when President Bola Tinubu appointed Olayemi Cardoso as Governor of the Central Bank of Nigeria. One of Cardoso’s first actions was to tackle the forex market dysfunction and restore credibility to Nigeria’s monetary policy framework.
Cardoso and his team moved quickly to unify the multiple exchange rates that had plagued the system, eliminated distortions through the implementation of a willing-buyer, willing-seller model, and cleared a backlog of over $7 billion in unmet forex obligations.
These bold reforms sent strong signals to investors and the market that Nigeria was serious about transparency, fiscal discipline, and macroeconomic stability.
Another significant move was the push to attract dollar inflows through both traditional and non-traditional sources. This included expanding the scope for International Money Transfer Operators (IMTOs), promoting diaspora remittance channels, improving naira liquidity access for money transfer firms, and liberalizing conditions for capital importation.
Together, these measures strengthened Nigeria’s net foreign exchange reserve position — which rose from a mere $3.99 billion at the end of 2023 to $23.11 billion by mid-2025. Gross external reserves also jumped from $33.22 billion to $40.19 billion in the same period.
Banks reactivate Naira cards for international use
With dollar liquidity improving and the naira gaining relative stability in the official window, Nigerian banks began restoring cross-border functionality for naira debit cards.
In May and June 2025, several major banks formally announced the lifting of restrictions.
UBA, in a notice to customers, said: “All UBA Premium Naira Cards, including Gold, Platinum, and World variants, are now enabled for international transactions. This means you can use your card for everyday payments, online shopping, POS, and ATM transactions across the world with ease and flexibility.”
Wema Bank joined with its own announcement: “Your Wema Naira Mastercard just went global! Now you can pay in dollars on all your favourite international platforms — Amazon, eBay, AliExpress, Netflix, Spotify, YouTube.”
FirstBank reintroduced a $500 monthly international spending limit on its naira Mastercard, while GTBank reinstated a quarterly international spend of $1,000 across online and point-of-sale channels, with ATM withdrawals capped at $500.
These policy shifts reflect banks’ confidence in the stability of forex inflows and indicate improved access to the official market for settlement of dollar-denominated obligations.
The impacts: Consumers, SMEs, digital economy rejoice
The reinstatement of international transactions using naira cards is a win on many fronts.
For consumers, especially digital natives and young professionals, it removes the friction of converting naira to dollars informally or relying on friends or relatives to make simple online purchases. Services like Spotify, Netflix, YouTube Premium, and Amazon can now be accessed directly with personal cards.
For freelancers, tech workers, and content creators, the change reduces overhead costs and streamlines payments for subscriptions, SaaS tools, and digital advertising platforms.
Temitope Adedayo, a Lagos-based entrepreneur said, “I run an online design business and I depend on Adobe Creative Cloud, Canva Pro, and domain hosting. For the last three years, I had to ask my cousin abroad to help pay or use third-party agents. Now I can just use my GTB naira card — it’s a huge relief.”
Small and medium enterprises (SMEs), especially those importing raw materials, making bookings, or managing logistics across borders, also benefit from the restored card functionality.
Forex market strengthening
The underlying driver behind these developments is a stronger forex market structure.
According to analysts at Financial Derivatives Company Limited, “Nigeria’s monthly forex inflows rose to $5.96 billion in May 2025 — a 62 percent increase from the previous month. They attributed the surge to rising oil revenues and more flexible forex policies introduced by the CBN”.
The apex bank has also maintained a stable exchange rate by adopting tighter monetary policies, discouraging speculative demand, and reducing incentives for arbitrage.
Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co, said:
“The moderating premium between the official and parallel markets and reduced arbitrage opportunities is responsible for the banks’ decision to restore international spending. It shows that the forex market is healing.”
CBN’s commitment to reform
The CBN Governor, Olayemi Cardoso without any doubt remains committed to long-term reform and sustainability.
Speaking recently on Nigeria’s macroeconomic outlook, he said: “Our mission is to restore confidence and transparency. The success we’re seeing in the foreign exchange market — improved reserves, re-opened card usage, and better access for businesses — is the result of hard, deliberate work. We will stay on this path.”
To further improve market efficiency, the CBN has announced plans to launch an electronic forex matching system, which will enhance transparency, price discovery, and accountability in the forex space.
The apex bank has also committed to prudent reserve management, market-driven exchange rate determination, and policies that prioritize investor confidence and stability.
Challenges ahead
While the resumption of international naira card usage is a major win, experts warn that Nigeria must remain vigilant to avoid slipping back into past habits.
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, said: “This progress is encouraging, but sustainability depends on continued inflows, transparency, and responsible fiscal management. Any shock — whether from oil prices, debt repayments, or poor policy coordination — could reverse the gains.”
There is also a need to deepen non-oil forex earnings, improve tax collection, and ensure fiscal responsibility to keep external balances healthy.
Expanding financial access and stability
Looking ahead, the CBN aims to deepen financial inclusion, enhance digital payments, and continue liberalising the foreign exchange market.
President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, praised the reforms and called for more coordination across government agencies.
He said, “The forex market is becoming more investor-friendly, but we must also ensure that retail users — travelers, students, SMEs — can access forex in a structured, predictable, and affordable manner.”
Gwadabe also emphasised the importance of diaspora remittances, which bring in about $23 billion annually, and called for more innovative products to attract inflows through formal channels.
A symbol of economic normalcy
Significantly, the reactivation of Naira debit cards for international transactions is more than just a banking headline. It is a powerful symbol of restored market confidence, growing forex liquidity, and improved monetary coordination.
“For millions of Nigerians, it represents convenience, access, and freedom to participate in a global economy. For the economy at large, it is proof that with discipline, transparency, and smart reforms, Nigeria can build a more resilient and inclusive financial future.
“While the journey to full economic stability is far from over, the resumption of naira card international use is an encouraging sign that Nigeria is on the right path — and that with sustained reform, more wins lie ahead” Cyril Ampka, an economist said.
You Might Be Interested In
Source: Independent.ng | Read More
0 Comments