The Central Bank of Nigeria (CBN)’s revised ATM withdrawal fees, slated for implementation on March 1, 2025, have sparked controversy and apprehension, particularly among low-income Nigerians. Fintech expert and techpreneur, Tope Dare, argues that the policy, while seemingly designed to enable banks to recoup operational costs and expand ATM networks, disproportionately burdens those who can least afford it. The tiered fee structure, charging N100 per N20,000 withdrawal at on-site ATMs and up to N500 for off-site withdrawals, effectively penalizes individuals making smaller, more frequent transactions, a common practice among low-income earners and small business owners. Wealthier individuals who withdraw larger sums less frequently will experience a significantly lower impact, creating a system that favors the affluent while further marginalizing the financially vulnerable.
Dare highlights the public outcry against the policy, especially the removal of the three free interbank withdrawals per month. This provision allowed individuals to access funds from any ATM without incurring charges, a crucial benefit for many Nigerians. A recent street survey revealed widespread frustration and concern among ordinary citizens who rely on these smaller transactions for their daily needs. The removal of this benefit coupled with the introduction of tiered fees represents a significant financial burden for a population already grappling with economic challenges.
Further exacerbating the situation is the potential for the policy to undermine financial inclusion efforts. With a significant portion of the Nigerian population lacking adequate financial literacy, the complex tiered fee structure may create confusion and distrust in the formal banking system. This could drive individuals towards less regulated, often more expensive informal financial services, ultimately widening the gap between the financially included and excluded. The CBN’s intention may have been to strengthen the banking infrastructure, but the potential consequences of discouraging small transactions could be far-reaching and detrimental to financial inclusion goals.
The Socio-Economic Rights and Accountability Project (SERAP) has taken legal action against the CBN, challenging the policy’s fairness and alleging violations of the Federal Competition and Consumer Protection Act. SERAP argues that the revised fees are exploitative and contradict the act’s mandate to ensure fair market practices. The lawsuit underscores the public perception of the policy as unjust and highlights the potential legal ramifications of implementing a fee structure that disproportionately affects the poor. The outcome of this legal challenge will significantly impact the implementation of the new fees and could force the CBN to reconsider its approach.
Dare advocates for exemptions or significantly reduced fees for small withdrawals to mitigate the impact on vulnerable populations. He emphasizes the importance of focusing on increasing accessibility to banking services rather than implementing policies that deter smaller transactions. He suggests that a more equitable approach would be to implement a system that considers the frequency and amount of withdrawals, ensuring that those making smaller, more frequent withdrawals are not unduly burdened. This could involve a combination of tiered fees for larger withdrawals and a lower, flat fee or a limited number of free withdrawals for smaller transactions.
As the March 1, 2025 implementation date approaches, pressure mounts on the CBN to reconsider the policy in light of the widespread criticism and potential negative consequences. The decision to proceed or revise the fee structure will have a significant impact on the financial well-being of millions of Nigerians, particularly those already struggling to make ends meet. The CBN faces a critical choice: prioritize the perceived needs of the banking sector or protect the financial interests of its most vulnerable citizens. The future of financial inclusion in Nigeria may hang in the balance.
