VANGUARD
The increasing weight of unfavourable economic condition owing to weakening purchasing power has moved Nigerians into a state of hopelessness over the direction of the economy.
Also, the widespread cut in spending by Nigerians in adjustment to the unfavourable economic conditions has triggered a decline in value of electronic payment transactions.
Volume and value of e-payment transactions had sustained upward trend over the years since the launch of the cashless programme by the Central Bank of Nigeria, CBN.
But Financial Vanguard’s findings showed that the value of electronic transactions fell month-on-month, MoM, by 5.7 per cent in June, representing the second MoM decline in three months.
This trend, according to analysts including members of the Monetary Policy Committee, MPC, of the CBN is due to lower consumer spending which has also constrained firms from expanding production.
Financial Vanguard findings from the NIBBS data on electronic transactions showed that total value of e-payment transactions fell 5.7 percent, MoM to N87.45 trillion in June 2024 from N92.8 trillion in May.
The decline was driven by declines in NIBSS Instant Payment, NIP, transaction and cheque transactions.
Analysis showed that the value of NIP transactions fell 9.0 percent, MoM, to N79.58 trillion in June from N87.48 trillion in May.
Similarly, the value of cheque transactions fell by 27 per cent MoM to N226 billion in June from N308.72 billion in May.
However, transactions via PoS and Nigeria Electronic Funds Transfer, NEFT, grew by 7.4 per cent and 62 per cent, MoM to N930.76 billion and N6.7 trillion respectively in June from N868.56 billion and N4.14 trillion in May.
Further details showed that the decline in e-payment transactions in June is the second in three months, after a similar but greater decline in April, when total value of transactions slumped by 23.1 per cent, MoM to N79.847 trillion from N88.04 trillion in March. The decline in April was driven by MoM declines of 9.3 per cent in NIP, 1.3 per cent in PoS and 9.1 per cent in NEFT during the month.
According to Mr. Bismarck Rewane, Managing Director/Chief Executive, Financial Derivatives Company, “The decline was due to lower consumer spending as inflation continues to bite.”
Reflecting the the inflationary trend behind the lower consumer spending driving the decline in e-payment transactions, data from the National Bureau of Statistics, NBS, showed that the Cost of a Healthy Diet rose by 32 percent to N1,041 per adult per day in May 2024 from N786 in December 2023.
“The Cost of a Healthy Diet (CoHD) is the least expensive combination of locally available items that meets globally consistent food-based dietary guidelines,” the NBS explained.
