In what signals a cautious return to normalcy in Nigeria’s foreign exchange (FX) landscape, several Nigerian deposit money banks have resumed international transactions on naira-denominated cards. This development, driven by an improving FX market, deserves both celebration and critical reflection.
After over two years of restrictions, where naira card international usage was slashed to as low as $20 per month or completely suspended, banks are now offering monthly and quarterly spending limits ranging from $500 to $1,000. These moves reflect improved dollar liquidity in the Nigerian Foreign Exchange Market, which as of July 4, 2025, traded at N1,528.56/$, a clear contrast from the N430/$ range of 2022. While this recovery is far from perfect, it represents meaningful progress that Nigerians must understand, appreciate, and responsibly engage with.
“The policy shift also aligns with International Monetary Fund recommendations, which have encouraged Nigeria to ease capital control measures under its transition to a more flexible exchange rate regime.”
The return of naira card usage abroad offers a profound relief to millions of Nigerians, students paying international tuition and visa fees, professionals maintaining global software tools, entrepreneurs sourcing goods online, and everyday consumers renewing subscriptions like Netflix and Microsoft 365. These previous routine activities became logistical nightmares due to FX constraints, forcing many into unreliable or costly alternatives.
For businesses, especially startups and SMEs in tech and e-commerce, the impact is even greater. Many were pushed toward parallel markets, dollar virtual cards, or offshore fintechs, often at black market rates, just to process everyday transactions. These solutions, while creative, were inefficient, expensive, and risked regulatory sanctions.
Now, with official bank cards usable abroad, consumer and investor confidence is rising. This is especially important at a time when Nigeria is seeking to improve its attractiveness to global investors and rebuild trust in its formal financial systems.
The policy shift also aligns with International Monetary Fund recommendations, which have encouraged Nigeria to ease capital control measures under its transition to a more flexible exchange rate regime. According to Razia Khan of Standard Chartered, this development reflects growing confidence that Nigeria’s FX market reforms are on the right path. As more transactions move to the official channel, the gap between official and parallel rates narrows, reducing speculative activity and bringing greater transparency.
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, notes a practical dimension to the merit. “As a Nigerian travelling abroad, you no longer need to carry large sums of dollars in cash. It is safer, more dignified, and much more convenient,” he says. Yusuf rightly emphasises that this return is not just about economics; it is also about restoring dignity and stability for Nigerians globally.
However, while the benefits are clear, so too are the risks. The reality is that Nigeria’s FX market is still fragile, and any reversal in oil earnings, capital inflows, or investor confidence could disrupt the current momentum. A sudden surge in card spending abroad could again pressure dollar reserves if not carefully monitored.
Read also:CBN, banks expand payment frontiers with naira card usage abroad
Also, by allowing international transactions on naira cards, banks expose themselves to currency mismatch risks. With the naira continuing to depreciate year-on-year, card transactions settled in dollars could lead to banks incurring FX losses or passing on additional fees to consumers in the long run. Already, some banks charge as much as N5,000 per international ATM withdrawal, raising questions about affordability and equity in access.
There is also the risk that an open card channel may inadvertently boost dollar outflows, especially in a consumption-driven economy where demand for foreign goods and services is high. Without a simultaneous rise in domestic productivity and exports, this can widen Nigeria’s balance of payment deficits and deepen reliance on external funding to stabilise the naira.
In the long term, currency stability requires more than just policy goodwill or central bank liquidity injections. It depends on structural reforms: improving exports, boosting local production, investing in infrastructure, and reducing Nigeria’s import dependence. If these are not pursued strongly, the current FX gains may prove unsustainable.
Still, the resumption of naira card usage abroad is a positive milestone in Nigeria’s economic recovery. It reflects a maturing financial sector that is gradually regaining its footing after years of uncertainty. For consumers, it offers convenience. For banks, it means more transactions, more revenue, and stronger customer engagement. For the government, it signals that recent FX reforms, however difficult, are beginning to bear fruit.
But this progress must be protected and scaled responsibly. Everyone has a role to play. The CBN must ensure adequate FX monitoring and timely policy responses. Banks should improve transparency on charges and spending limits. Businesses must continue sourcing inputs locally where possible, and consumers should avoid unnecessary dollar-based consumption.
Moreover, the conversation must go beyond card limits to larger reforms. How can Nigeria build export capacity? How can the country produce globally competitive services and goods to earn FX, rather than spend it? Can the tech and creative industries be scaled to become major dollar earners?
Nigeria’s FX story is far from over, but the return of naira card usage abroad is a chapter worth celebrating. It represents resilience, reform, and a pathway toward a more connected and competitive economy. However, to make this chapter last, all stakeholders, government, businesses, banks, and citizens, must embrace not just the convenience but also the responsibility that comes with it.
FX stability is not just about the dollar; it is about discipline. Together, we can make this work for the long term.
