2025: The year of tariffs and levies 

OLUWATOSIN EMMANUEL OLADETAN

Oluwatosin Oladetan, (MBA, ACCA, PMP, NIM, FMVA, BIDA, SPY-SP, TRCN ), a business and corporate strategist, financial analyst, project manager, process improvement and engineering professional, is a Volunteering Contributing Analyst 

CBN reviews ATM transaction fees 

The years 2023 and 2024 were filled with uncertainties for businesses and individuals within Nigeria due to the persistent rise in inflation, interest rates, poverty level, depletion of consumer purchasing power, and livelihood of citizens. The federal government admonished Nigerians that the pains and inability of the poor to breathe due to economic and fiscal suffocation were required to prepare Nigeria for economic prosperity in the years ahead. Early in the year 2025, the foreign exchange rate of the naira to the dollar attained stability and remarkable appreciation which started in the early days of December 2024 after the CBN implemented the Bloomberg BMatch system as the authorised Electronic Foreign Exchange Matching System (EFEMS) introduced on November 25, 2024. The CBN also extended the period of a maximum of $25,000 weekly FX sales from authorised dealers to bureaux de change (BDCs) from January 31, 2025, to May 30, 2025. These actions contributed to narrowing the gap between the official market FX rate and the parallel market FX rate. Analysts are still very skeptical about the sustainability of the FX appreciation and stability, as a further devaluation of the naira to the dollar was expected in 2025.

The national assembly recently passed a fiscal appropriation expenditure framework of ₦54.99 trillion, which is a slight increase from the initial ₦49.7 trillion presented in December 2024, ₦54.6 trillion fiscal expenditure framework represented by the Nigerian 16th president to the national assembly a few days ago to address inflationary issues arising from minimal funds allotted to productive areas of the economy. The Senate president, Godswill Akpabio, justified the 9.9 percent increase of the approved 2025 budget from the initial proposed budget of ₦49.7 on the basis of increased additional revenue opportunities from government ministries, departments, and agencies. The Nigerian Senate president stated that increase in revenue generation from the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS) would be deployed to address capital developmental issues in solid minerals, the Bank of Agriculture, the Bank of Industry, critical infrastructure, military barracks accommodation, military aviation, irrigation development, transportation infrastructure, border communities’ infrastructure, and key sectors.

The CBN, in a circular issued to all banks and other financial institutions dated February 10, 2025, adjusted the ATM transaction fees as a response to the increased cost of managing, operating, and increasing efficiency in ATMs after a review of the ATM transaction fees prescribed in section 10.7 of the extant CBN Guide to Charges by Banks, Other Financial and Non-Bank Financial Institutions Guide issued in 2020. The implementation of the revised fees will commence on March 1, 2025, and what was most shocking from the policy review is that the three free monthly withdrawals allowed for Remote-On-Us (other bank’s customers/Not-On-Us consumers) are no longer applicable. The first ATM in Nigeria was installed by the National Cash Registers (NCR) in 1987 for Societe Generale Bank of Nigeria with the trade name “CashPoint 24”, which later became the defunct Heritage Bank. The ATM by Societe General Bank of Nigeria was accepted in the Nigerian market by 1989 before First Bank Plc made its ATM operational in 1991 with the trade name “First Cash”. From one ATM in 1989 to over 22,600 ATMs in 2021 indicates a remarkable growth and acceptance by Nigerians willing not to visit the four walls of a banking hall for financial transactions. From a review of ATM performance, 16,714 were active with transaction counts of 496,436,959 and transactions value of ₦12.21 trillion within the first half year of 2024. The ATM transaction counts indicate an increase of one percent (1%) from 492,757,656 and a decrease of 10 percent from ₦13.58 trillion recorded in H2-2023. As compared to Point of Sale (PoS), whose terminals deployed increased by 20 percent from 2,448,805 deployed in H2-2023 to 2,935,765 deployed in H1-2024, transaction counts increased by 29 percent from 4,974,979,119 in H2-2023 to 6,395,670,571 in H1-2024, and transaction value increased by 39 percent from ₦61.902 trillion in H2-2023 to ₦85.914 trillion in H1-2024. Is there a likelihood that Nigerian banks are intentionally phasing out ATMs due to low revenue per transaction, higher operational costs, and maintenance compared to POS terminals? The regulatory guide to bank charges was first issued in 2004 and revised by a circular on March 27, 2013, effective April 1, 2013, of which ATM charges within the bank and on other bank ATMs do not attract any charge, while ₦150 is charged on approved independent ATMs. The guide to charges by banks and other financial and non-bank financial institutions was revised by a circular issued December 20, 2019, and effective January 1, 2020, which stipulated ATM charges within the bank and approved independent ATMs at no charge and a ₦35 per transaction charge on Not On-Us (withdrawal from another bank’s ATM) after the third withdrawal within the same month. The increase of Not-On-Us (withdrawal from another institution’s ATM) charges from ₦35 per transaction after the third withdrawal in the month to ₦100 per ₦20,000 withdrawal on on-site ATMs and a charge of ₦100 plus a surcharge of not more than ₦500 per ₦20,000 withdrawal raises a concern to the final consumer. Listed below are some interesting conversations related to this subject matter:

• How will POS operators adjust their charges in response to the increased charges on ATM transactions?

• Will this higher transaction cost strategy increase the opportunity for electronic transactions and reduce the cash in circulation?

• How is this policy structured to address 54.2 million (51%) banked, 5.3 million (5%) formal financial included, 11.6 million (11%) informal financial included, and 33.9 million (32%) financially excluded bankable Nigerians, of which the majority of the financially excluded bankable Nigerians are within rural areas, which makes up 41.4 percent of the 2023 Nigerian population enumeration area frame classification, as formal financial institutions tend to be urban biased?

• How will the CBN ensure that all designated ATM points are funded at all times and reduce issues of “Inability to Dispense Cash” or “Temporarily Out of Service”, which is more predominant during non-banking hours?

• What is the impact of the increased charges, which make up the banks’ non-interest income and commissions from designated ATM points on financial institutions’ profit before tax (PBT) of over ₦1 trillion, such as Zenith Bank and GTCO?

• How do these increased ATM charges impact the real economy and inflationary pressures?

• How will these revised transaction charges enable the Nigerian banking industry to support attaining a Nigerian economy of over $1 trillion in the next few years?

A critical review of the impact of monetary or fiscal policies should be carefully evaluated by the CBN or the federal government of Nigeria prior to implementation as very sound policies may not deliver the right value if the implementation structure, framework and timing is not appropriate.

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