Nigeria’s Cashless Transition: A Digital Revolution Amidst a Season of Hardship

Six months after the Central Bank of Nigeria (CBN) aggressively reinforced its cashless policy alongside the controversial naira redesign, the nation remains at a crossroads. What was intended as a sophisticated leap into a digital-first economy has, for many, felt like a grueling marathon through cash scarcity and economic friction.

The policy, which imposed strict weekly withdrawal limits of ₦500,000 for individuals and ₦5 million for corporates, was designed to mop up excess liquidity and curb informal currency hoarding. However, as the dust settles, the narrative is split between those celebrating a fintech explosion and those mourning the paralysis of the informal market.

Despite the chaos, the data is undeniable. According to the Nigeria Inter-Bank Settlement System (NIBSS), electronic payment volumes have reached record highs, with POS transactions surging by over 300% in the first half of the year.

Chief Product Officer, Agency Services at Onafriq (formerly MFS Africa) and a leader in the digital payments space, Dapo Richards, views this shift as a bittersweet milestone.

Richards, who oversees the Baxi platform, one of Nigeria’s largest agent networks, noted that the policy acted as a forced catalyst for digital adoption. He observed that the nation is witnessing a decade’s worth of digital transformation compressed into a few months.

On the Baxi platform alone, the network has grown to over 460,000 agents as they become the primary “human ATMs” for their communities. While the demand for digital rails has never been higher, Richards admits the pressure on the infrastructure has been immense.

The heavy human cost is visible in the long queues at ATM galleries and the 40–60% drop in sales reported by market traders who rely on physical cash.
Richards explained that for a cashless policy to be inclusive, the reliability of the network must be near 100%.
High failure rates and transaction costs are not just technical glitches; for a small business owner in a place like Oshodi or a rural village, they are direct threats to their daily bread.

Richards argued that “the way forward requires heavy investment in digital infrastructure to handle transaction surges, subsidizing micro-transactions to protect low-income earners, and providing stronger support for the agency banking networks that bridge the gap between cash and digital”.

“The goal should not just be to remove cash, but to build a digital ecosystem so reliable and accessible that people choose it over paper money. Nigeria’s 2023 cashless experiment will likely go down in history as a painful necessity,” he maintained.

He added: “While it has undoubtedly accelerated the digital revolution, the scars left on the informal economy remain deep, and the coming months will determine if the gains of this transition finally outweigh its heavy human and economic costs”.

For Mrs. Aisha Bello, a market woman in Lagos, the policy feels less like digital progress and more like a barrier, as she recounted spending days in queues just to access her own funds.

Joining her in this struggle is Mr. Emeka Nwosu, a commercial bus driver in Ojo, Lagos, who shared that he has had to park his vehicle on several days because passengers simply do not have the small denominations to pay fares, and transfer delays make digital payments impossible during transit.

Similarly, Mallam Musa Ibrahim, a prominent onion seller at the Mile 12 Market in Lagos, lamented that his business has slowed to a crawl. He explained that many of his bulk buyers arrive without the necessary cash, and because network downtime often delays “alerts” for hours, he is forced to choose between turning customers away or risking his livelihood on transactions he could not immediately verify.

As the CBN faces mounting pressure to ease withdrawal limits, industry leaders like Richards, economist Okafor and citizens such as Mrs. Bello, Mallam Ibrahim, and Mr. Nwosu called for a shift in focus from enforcement to enablement.