Macroeconomic Report & Economic Updates

The International Monetary Fund (IMF), has in its January World Economic Outlook improved its projection for Nigeria’s 2023 economic growth rate to 3.2 per cent, representing 0.2 percentage points increase from the 3.0 per cent earlier projected in its October 2022 World Economic Outlook^. The IMF based its reviewed growth on improved security measures in the oil sector in the country.

On Thursday, January 26th, 2023, the Central Bank of Nigeria (CBN) officially unveiled its national domestic card scheme in a session co-hosted by the Nigerian Inter-Bank Settlement System (NBSS). The domestic card scheme, which is named AfriGo, is part of the apex bank’s strategies towards advancing cashless payments and deepening financial inclusion in the country. 

According to data from the Nigeria Inter-Bank Settlement System (NIBSS), cashless transactions in Nigeria increased by 42.05 percent to reach N395.47 trillion in 2022. The data revealed that Nigerians spent more through cashless forms of payment, which was N117.07 trillion more than the N278.39 trillion total cashless transactions processed in 2021. The N395.47 trillion processed in 2022 was composed of transactions made on the Instant Payment System and Point of Sales terminals, the channels where cashless transactions are recorded on the NIBSS.

According to the World Bank’s latest Nigeria Development Update published in December 2022, with the title “Nigeria’s Choice”, the country’s gross domestic product (GDP) is expected to grow by 2.9 percent in the year 2023, less than the 3.1 percent for 2022. Although expected to be slightly faster than the growth of the population, this growth rate, according to the update, is still below pre-2015 levels, those of oil-producing countries (4.8 percent), and the average for Sub-Saharan Africa (3.6 percent). Services, trade, construction, and oil production are expected to lead to growth in 2023.

Data from the Nigeria Inter-Bank Settlement Systems (NIBSS) shows that transactions performed electronically through the NIBSS Instant Payment platform (NIP) in Nigeria grew to N38.9 trillion in November 2022, which is 12.7 percent higher than the N34.5 trillion recorded in October 2022². On a year-on-year (YoY) basis, the N38.9 trillion value of e-payments increased 50 percent from the N25.9 trillion recorded in November 2021. The growth in e-payment transactions is partly due to the cashless policy of the Central Bank of Nigeria (CBN) and the aftermath effect of COVID-19 on the payment system. COVID-19 made firms introduce online payment into their payment system since people were ordering their products online. As a result, many Nigerians are adopting e-payment channels for payment. The withdrawal limit policy, which will take effect from January 2023, is expected to increase the use of electronic transactions across the country. However, high cybercrimes continue to undermine the effectiveness of the CBN cashless policy. Hence, the CBN and other financial intermediaries involved should focus on strengthening cybersecurity in the country to ensure the safety of funds of individuals and corporate entities.