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Nigerian banks last week resumed international usage of naira debit cards, setting various spending limits as foreign exchange (FX) conditions improve, driven largely by the reforms of the Central Bank of Nigeria (CBN).

The move signals a significant milestone in expanding Nigeria’s payment frontiers and restoring confidence in the financial system.

In recent years, the CBN has implemented difficult but necessary reforms to address longstanding obstacles to price and exchange rate stability. These reforms are beginning to yield positive results, reflected in rising FX reserves, increased access to foreign exchange through official channels, easing inflation, and now, the return of naira card usability for international transactions.

Muda Yusuf, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), has attributed the recent resumption of international transactions with Naira cards by Nigerian banks to improved liquidity and stability in the foreign exchange (FX) market. According to him, these developments have restored confidence in the system, both for financial institutions and their customers.

“What has happened is that the liquidity in the FX market has improved, the exchange rate has been more stable, and this has elevated the level of confidence of the banks in opening up transactions,” Yusuf explained. “For them, it’s a good business because the more these transactions take place, the better for them. And for the users, it provides a lot of convenience for their transactions.”

He emphasised the practical benefits for Nigerians, especially those who travel abroad. “Imagine as a Nigerian who’s travelling abroad, you don’t need to be carrying dollars in your pocket or in your bag. Sometimes people have been embarrassed because of that. So with your Naira card, you can do whatever transactions you want,” he said.

Yusuf also pointed out how the development eases cross-border support for Nigerians living outside the country. “For Nigerians that are abroad, if they have Naira accounts here, you can pay into their Naira accounts and they do their dollar transactions. I think it provides a lot of convenience.”

For many analysts, Nigeria’s potential remains immense, but the success of these reforms depends on continued collaboration between monetary and fiscal authorities.

Previously, one of the biggest challenges facing Nigeria’s economy was the limited availability of FX through official channels. This constraint forced businesses and travelers to rely heavily on the parallel market, creating arbitrage opportunities that fueled speculative activity.

To address this, the CBN initiated a series of bold reforms to attract foreign capital, restore market confidence, and stabilise prices. In 2023, the new administration, alongside Olayemi Cardoso, CBN governor liberalised the FX market, discontinued monetary financing of the fiscal deficit, removed fuel subsidies, and strengthened revenue collection, all in a bid to tackle inflation and rebuild economic buffers.

These actions have since led to a rise in international reserves and increased access to dollars through official platforms. Nigeria successfully re-entered the international capital markets in December 2024 and received improved ratings from global agencies. The operationalisation of a new domestic private refinery has also moved Nigeria up the value chain in a deregulated oil market.

Naira Cards Resume International Use

As FX liquidity improves, Nigerian banks have lifted a three-year moratorium on the use of naira-funded debit cards abroad. Tier-1 banks such as United Bank for Africa (UBA), FirstBank, and GTBank, along with mid-tier lender Wema Bank, have announced the resumption of international transactions on their naira debit cards.

The move comes after banks had suspended international usage of naira cards due to dollar scarcity, allowing such transactions only through dollar-funded domiciliary accounts. The resumption marks a shift in FX conditions and regulatory confidence.

FX inflows have improved substantially, with Nigeria attracting $5.96 billion in monthly inflows since May 2025. According to industry data, May recorded a 62 percent month-on-month increase in total FX inflows, one of the highest in recent months, driven by increased participation from both domestic and foreign investors.

In a note to investors, analysts at Financial Derivatives Company attributed the rise in FX inflows to higher oil prices and the CBN’s diversification of inflow channels.

The CBN has opened up multiple FX sources to boost dollar supply, support manufacturers, and meet retail demand. Initiatives include facilitating diaspora remittances through new products, licensing more International Money Transfer Operators (IMTOs), adopting a willing buyer-willing seller FX model, and ensuring timely access to naira liquidity for IMTOs, all aimed at streamlining FX access for authorised dealers and participants across the value chain.

In a customer notice, UBA said, “All UBA Premium Naira Cards, including Gold, Platinum, and World variants, are now enabled for international transactions. You can now use your Premium Naira Card for everyday payments, online shopping, POS, and ATM transactions worldwide, with more ease and flexibility.”

Wema Bank added, “Your Wema Naira Mastercard just went global! Now you can pay in dollars on all your favourite international platforms: Amazon, eBay, AliExpress, Netflix, Spotify, YouTube.”

FirstBank announced that its naira Mastercard can now be used for international purchases, allowing spending of up to $500 monthly. GTBank set a quarterly limit of $1,000 for online and PoS transactions, and $500 for ATM withdrawals.

Banks had earlier suspended such services amid dollar scarcity. But with improved FX market liquidity, many, including Stanbic IBTC, Access Bank, Standard Chartered Bank, and others have reviewed or reinstated international usage limits on naira cards.

According to Ayokunle Olubunmi, head of Financial Institutions Ratings at Agusto & Co, the improved FX liquidity supported banks’ decision to reactivate naira cards for global transactions. “The moderating premium on the parallel market and reduced arbitrage opportunities also influenced the decision,” he said.

By enabling international naira card usage, banks are facilitating seamless payments for travelers and online shoppers, including hotel bookings and international subscriptions.

FX Reserves Rebound Under Cardoso

Cardoso has led an aggressive effort to rebuild Nigeria’s economic buffers. At the time he assumed office in October 2023, the CBN faced a $7 billion FX backlog and a fragmented FX regime that discouraged investment and depleted reserves.

Under Cardoso’s leadership, reforms unified exchange rates, eliminated distortions, and restored transparency, allowing the CBN to clear the FX backlog and giving businesses, from manufacturers to airlines, greater confidence in forward planning.

“The unification has enabled us to clear outstanding foreign exchange obligations. We are introducing an electronic FX matching system to further enhance market functionality,” Cardoso said.

According to the CBN, Nigeria’s net FX reserves rose to $23.11 billion, the highest in over three years, up from $3.99 billion at end-2023. Gross reserves also rose to $40.19 billion from $33.22 billion.

The net FX reserves (NFER), which adjust for near-term liabilities such as FX swaps and forwards, are considered a more accurate measure of available buffers. The increase is the result of reduced short-term obligations and strategic policies to rebuild confidence and diversify FX inflows, especially from non-oil sources.

“This improvement in our net reserves is not accidental; it is the outcome of deliberate policy choices aimed at rebuilding confidence, reducing vulnerabilities, and laying the foundation for long-term stability,” Cardoso said. He added that reserves are expected to continue rising in the second quarter of 2025, supported by improved oil production and stronger non-oil exports.

More FX Channels Strengthen Inflows

Foreign capital remains crucial to Nigeria’s economic recovery. The CBN is actively cultivating more FX sources to enhance liquidity, access, and confidence across sectors.

Efforts to boost diaspora remittances estimated at $23 billion annually have been prioritised, alongside licensing new IMTOs and expanding the FX access pipeline through reforms.

Aminu Gwadabe, president of the Association of Bureaux De Change Operators of Nigeria (ABCON), praised the CBN’s creative policy direction. “It reflects the level of innovation and commitment the Cardoso-led team has invested in ensuring forex flows into the economy and remains accessible,” he said.

The Road Ahead

In a recent statement, Axel Schimmelpfennig, IMF Mission Chief to Nigeria, emphasised the need for sustained, inclusive growth. “Nigeria needs stronger and more sustained growth to lift millions out of poverty and food insecurity. This does not happen overnight,” he said. He stressed the importance of effective cash transfer systems, realistic budgeting, and transparency to support growth.

Christian Ebeke, IMF’s resident representative in Nigeria, highlighted the need to improve domestic revenue mobilization. “This is essential for funding growth-enabling sectors such as agriculture, electricity access, infrastructure, and climate adaptation. The government’s tax reforms will help simplify tax compliance and expand the tax base,” he said.

Both officials affirmed that while Nigeria’s potential is clear, achieving it will require consistent reform, a robust social safety net, and sound macroeconomic management.