Did you know that many businesses faced serious hardship during the first quarter of 2023 when the Central Bank of Nigeria (CBN) cashless policy was tightly implemented.
This unexpected disruption affected the economic activities adversely in Nigeria leaving most businesses ‘a shadow’ of themselves
Yet in the midst of this disruption, commercial banks, financial institutions the Federation Accounts Allocation Committee (from 433.4 million volume achieved in the first quarter of 2022) raked in ₦135.56 trillion from electronic payment transactions.
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The Nigeria-Interbank Settlement System (NIBSS), revealed that ₦135.52 trillion was generated by commercial banks and other financial institutions in Q1 this year.
According to NIBSS, the value of electronic payment transactions by the financial services institutions grew by 298% year-on-year, Q1 of 2023, when compared to ₦34.04 trillion generated between January and March 2022.
Also, the volume of e-payment transactions recorded rose to 4.7 billion, this is a 984% increase from 433.4 million volume achieved in the first quarter of 2022.
What FAAC Made From EMTL
The federal, state and local governments also gained ₦40 billion from Electronic Money Transfer Levy (EMTL) during the period.
The EMTL was a component of the monthly FAAC allocations of ₦750.17 billion, ₦722,67 billion and ₦722.67 billion in January, February and March 2023 respectively.
The EMTL which was introduced in 2020, provides for a singular and one-off levy of ₦50 on the recipient of any electronic receipts or transfers of ₦10,000 or above.
For equivalent receipts or transfers carried out in other currencies, the levy will be charged at the exchange rates determined by the Central Bank of Nigeria (CBN).
The NIBSS stated that ₦42.42 trillion worth of e-payment transactions were made in January this year while the value dropped in February by 4.3% to ₦40.6 trillion before ascending to ₦54.5 trillion in March.
According to the National Bureau of Statistics (NBS) FAAC received ₦37.91 billion, ₦11.64 billion and ₦14.48 billion as EMTL in January, February and March respectively during the year.
Factors Responsible For Performance
The 298% year-on-year increase in the value of electronic payment transactions and 984% increase in volume were driven by the CBN’s Naira redesign policy which sparked preference to alternative payment systems.
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The cashless policy of the CBN created a major boost for financial inclusion as many Nigerians made use of the various e-payment channels.
More Nigerians, including businesses, embraced the use of electronic payment platforms amid cash-in-hand challenges in the implementation of the Naira re-design policy of the federal government.
As the banks ran out of cash and their Automated Teller Machines (ATMs) failed to dispense new notes, Nigerians ran into severe difficulties with socio-economic activities greatly challenged.
As a result, to meet their daily needs such as feeding, transportation and communication, a large number of Nigerians moved to digital transactions and alternative payment platforms.
