E-Financial
Stakeholders Lament CBN’s Interest Rate Reversal on Intervention Loans
Central Bank of Nigeria’s (CBN) decision to revert interest rate on its Covid-19 intervention facilities has drawn the ire of stakeholders as well as experts, whose thoughts are that the action will not augur well for the beneficiaries, as the country faced inflationary rate pressure among other worsening economic indicators, according to Leadership.
Economists, who spoke with on the matter, said the CBN’s decision was ill-conceived as the country’s economy has yet to recover from the devastating effect of COVID, which could heighten unemployment rate, worsen production level and reduce economic growth.
This is just as stakeholders argued it would lead to higher obligations for the beneficiaries.
The apex bank had, last week, notified all the banks and other financial institutions (OFIs) of the reversal from five per cent, back to nine per cent.
In the circular, which was signed by Chibuzo Efobi; director of Financial Policy and Regulation Department, dated August 17; and titled ‘Adjustment of Interest Rate on all Central Bank of Nigeria Interventions’, the CBN stated that all intervention facilities granted effective July 20, 2022 should be at nine per cent per annum.
It also said that existing facilities granted prior to July 20, 2020 should be at the same nine per cent per annum but effective September 1, 2022.
The monetary authority had on March 15, 2020, following the outbreak of the COVID-19, extended interest rate reduction and granted a one-year moratorium on all principal payments on its intervention facilities in an effort to reduce the negative impact of the pandemic on businesses and households.
As such, it granted all deposit money banks (DMBs) leave to consider temporary and time-limited restructuring of the tenor and loan terms for businesses and households most affected by the Covid-19, particularly the oil and gas, agriculture, aviation, manufacturing, healthcare and other sectors of the economy.
The concessionary interest rate of five per cent on its intervention facilities, the CBN had on March 3, 2021 extended by 12 months to February 28, 2022, and subsequent to March 1, 2023, before it shockingly revert it in a notification last week
Adams Adebayo, chairman, National Association of Small and Medium Enterprises (NASME), Lagos State Chapter, expressed worries that the reversal came at a time inflation rate has worsened to 19.64 per cent; dollar, over N430 at official rate and about N720 at the parallel market price.
Coupled with hike in jet A1 fuel that had pushed one-way flight ticket, for instance from Abuja to Lagos, to almost N180,000 for business class, even aa manufacturers are closing factories due to high cost of raw materials.
“This means sectors such as agriculture, power, and aviation which have enjoyed trillions of dollars in intervention funds from the central bank would have to pay nine per cent, an instant of the five per cent previously enjoyed.
“All the beneficiaries of such intervention would be adversely affected by this policy and change in terms and conditions,” he said.
According to Adebayo, small business might be headed towards a total collapse as most of such categories of business would not be able to compete favourably.
“They (small businesses) might equally downsize their staff strength to cut costs,” adding that “the termination of the facility by CBN is not in the interest of an average business manager or an enterprise in Nigeria.
Chinedu Nevo, an economist and PhD candidate at the Faculty of Business and Law, the Open University Business School, Milton Keynes, United Kingdom, said, the reversal by the CBN was ill-conceived.
According to him, Nigeria is still far from recovering from the impacts of COVID-19, especially from the economic angle.
“Actually, many sources have argued that it will take many African countries more than five years and beyond to recover from the negative effects of COVID-19.
“Thus, the reversal by the apex bank was ill-conceived. This is even worse when placed side by side with the high inflation bedeviling the Nigerian economy at the moment,” he said.
Nevo argued that, from a basic economic perspective, when interest rates increase (in this case, from five per cent to nine nine), businesses or entities with existing loan obligations have higher interest payments, less disposable income and bigger overheads.
His words, “With a simultaneously high inflation, such entities struggle to maintain their daily operations, and over time, may even risk collapse. In some other cases, the entities may only be able to pay off the interest only, rather than the loan itself.
“These are the ways that the interest rate reversal would affect the entities. In all honesty, the CBN, by this move, is not encouraging these entities to thrive. This will also affect productivity on a macro scale. In my opinion, the COVID-19 interest rate should be maintained.”
Cheta Uzah, a lecturer at the Department of Banking and Finance, Rivers State University Port Harcourt, also responded that the Nigerian economy has yet to recover from the devastating effect of COVID.
He noted, however, that the apex bank is struggling to deal with the double digit inflation that has resulted from the enormous amount of government borrowing and spending during the COVID period.
“The expansionary monetary policy by the CBN has resulted in massive debts, worsening devaluation of the naira and poor levels of economic growth,” Uzah said.
According to him, the impact of the interest rate reversal on CBN’s intervention facilities would be that fewer small and medium scale investors will be less likely to apply for the intervention loans since higher interest rates would mean higher payment of interest on the loans.
He said, “If fewer businesses are taking loans to expand their business, it means the fewer opportunities of these businesses to employ new workers, increase production of goods and services..
The don added, “As such, unemployment would get worse, production should reduce and economic growth is likely to decline. To make matters worse, the higher level of insecurities caused by bandits, herdsmen, kidnappers, Boko Haram and Militants is making the business environment difficult.
“The higher levels of inflation and declining value of naira is likely to ensure many small and medium scale businesses shutdown as the difficult business environment makes them unprofitable.”
Nigeria had entered into recession following negative growth rates of -6.10 per cent and -3.62 per cent recorded in the second and third quarters of 2020, before it narrowly
Now, there is a likelihood that the country might enter into another recession this year if all monetary policies are not properly tightened.
According to the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), there is an urgent need to implement policies to prevent Nigeria falling into a third recession by the end of this year, pointing the direction of declining trend in the nation’s economic growth, which had remained worrisome.
Nigerians lost N25.85 billion to digital payment fraud in 2025, according to Central Bank of Nigeria (CBN).
Though the figure represents a significant decline from the N52.26 billion recorded in 2024, CBN, said the losses remained substantial for payment service providers (PSPs).
According to the report, although the value of digital payment fraud declined significantly year-on-year, when compared to the N52.26 billion recorded in the previous year, the losses remained substantial for Payment Service Providers (PSPs), underscoring the need for stronger fraud prevention measures across the industry.
In the report, the CBN, also identified systemic risks, cyber threats, the dominance of a few systemically important payment service providers, and the activities of unlicensed payment companies as major concerns confronting the financial sector.
According to the report, although the value of digital payment fraud declined significantly year-on-year, the losses remained substantial for Payment Service Providers (PSPs), underscoring the need for stronger fraud prevention measures across the industry.
“Digital payment fraud in Nigeria stood at N25.85 billion in 2025,” the apex bank said.
It noted that while this represented a considerable improvement from the N52.26 billion lost in 2024, the amount remained significant.
“Though this was lower than N52.26 billion in the preceding year, it represented a substantial loss for PSPs,” the report stated.
The CBN attributed the reduction in fraud losses to enhanced security measures implemented across the financial sector.
It said, “The lower losses in 2025 reflected improvements in monitoring, BVN-NIN integration, and tighter controls.”
Beyond fraud, the report warned that Nigeria’s rapidly expanding digital payments landscape faces increasing systemic vulnerabilities as banks and fintech companies become more interconnected through shared payment infrastructure.
According to the report, a major operational failure involving a single payment service provider could quickly spread across the financial system because of the growing dependence on integrated payment platforms.
The CBN observed that despite ongoing efforts to strengthen payment system integration, interoperability remains a significant challenge.
It disclosed that about half of fintech stakeholders continued to express dissatisfaction with the current level of system-wide interoperability.
The report stated that “about 50.00 per cent of fintech stakeholders continued to rate system-wide interoperability as poor, primarily due to the lack of universal APIs and data-sharing standards.”
The apex bank also expressed concern over the concentration of payment activities among a few Systemically Important Payment Service (SIPS) providers, warning that operational failures involving any of them could have widespread consequences.
It explained that the failure of such providers could trigger a “domino effect”, where insolvency or operational glitches in one payment service provider spread rapidly to others, disrupting the smooth functioning of the financial system.
Cybersecurity also featured prominently among the risks identified in the report.
The CBN warned that payment service providers remain vulnerable to ransomware attacks, data breaches and credential theft, noting that cybercriminals are becoming increasingly sophisticated in targeting financial institutions.
According to the report, “Banking and fintech institutions remained prime targets for ransomware, data leaks, and credential theft.”
It added that, “Cyber threats in Nigeria are no longer random cybercrimes, but increasingly targeted, organised, and identity-driven campaigns.”
The report further cautioned Nigerians against transacting with unlicensed payment companies, stressing that such entities operate outside regulatory oversight and expose users to significant financial risks.
It warned that customers using unlicensed PSPs are not protected by existing regulatory safeguards and that such operators could facilitate illicit financial activities.
“Users of unlicensed PSPs are not covered by regulatory protection that comes with effective oversight and supervision,” the CBN said.
It further warned that, “Unlicenced payment companies are gateways for money laundering which could undermine regulatory efforts and corrode public trust.”
The report underscores the growing importance of strengthening fraud detection systems, improving payment infrastructure interoperability, enhancing cybersecurity resilience, and intensifying regulatory oversight as Nigeria continues to expand its digital payments ecosystem.
Nigeria Revenue Service (NRS) yesterday announced that medium and large companies in Nigeria that earn income from cryptocurrency and other virtual asset transactions will now be subject to a 30 per cent corporate income tax.
NRS stated this in its new guidelines setting out a tax framework for cryptocurrency and other digital asset transactions.
The guidelines cover registration, record-keeping, valuation, and tax treatment for VASPs, P2P operators, and individuals in the virtual asset space.
NRS said the move is aimed at encouraging voluntary compliance and improving transparency as Nigeria’s digital asset sector grows.
The Guidelines on the Taxation of Virtual Assets, provide a comprehensive framework for the taxation of virtual asset transactions and businesses operating within Nigeria’s digital economy.
The guidelines apply to companies, individual taxpayers, Virtual Asset Service Providers (VASPs), peer-to-peer (P2P) marketplace operators and other participants in the virtual asset ecosystem
The latest framework follows the signing of the Presidential Executive Order on Virtual Assets Coordination, 2026 by President Bola Tinubu, which established a coordinated regulatory structure for cryptocurrencies, stablecoins, tokenised assets and other digital assets across government agencies.
According to the NRS, companies that derive profits from virtual asset activities will be taxed under the provisions of the Nigeria Tax Act (NTA), 2025. While small companies will continue to enjoy applicable tax exemptions under the law, medium and large companies will be liable to the standard 30 per cent corporate income tax rate.
The agency stated that taxable income under the guidelines covers a broad range of virtual asset-related activities, including cryptocurrency trading, the operation of virtual asset exchanges, transaction fees, brokerage commissions, custody and wallet services, token issuance, mining, staking, decentralised finance (DeFi) activities, investment gains and other virtual asset business operations.
According to the guidelines, “Applicable rates under the NTA include progressive rates for individuals, and 30 per cent for companies other than small companies.”
The NRS said the guidelines were introduced to provide clarity, certainty and consistency in the administration of Nigeria’s tax laws as they apply to virtual assets, adding that the framework is intended to improve transparency, encourage voluntary tax compliance and support the development of an efficient tax regime for the digital asset sector.
The agency also clarified that merely holding cryptocurrencies or other virtual assets does not constitute a taxable event.
Any appreciation in the value of a digital asset while it remains in a taxpayer’s possession will not attract income tax until the asset is sold, exchanged or otherwise disposed of through a taxable transaction.
Similarly, transfers of cryptocurrencies or other virtual assets between wallets owned and controlled by the same individual are exempt from income tax, provided there is no change in beneficial ownership.
This means that moving digital assets such as Bitcoin or Ether between personal wallets will not trigger a tax liability.
However, the exemption does not extend to transfers involving companies, partnerships, trusts, unincorporated associations or other legal entities, where different tax rules may apply.
The NRS further explained that although these non-taxable transactions do not attract immediate tax, they establish the acquisition cost for future disposals.
Consequently, taxpayers are required to maintain adequate records of acquisitions, transfers and disposals to facilitate accurate tax computations when taxable events occur.
The guidelines also reaffirm that unrealised gains on cryptocurrencies and other virtual assets are not subject to income tax. Instead, tax liability arises only when a taxable disposal takes place, aligning Nigeria’s approach with internationally recognised principles for the taxation of digital assets.
The issuance of the guidelines is expected to provide greater regulatory certainty for investors, businesses and digital asset service providers, while strengthening the government’s efforts to expand the tax base and improve compliance in Nigeria’s growing virtual asset ecosystem.
As more Nigerians adopt digital financial services, fraudsters are also finding new ways to target unsuspecting users. Nigeria has recorded more than 24.1 million compromised online accounts since 2004, with hundreds of thousands of additional cases reported in early 2026. While these figures are not limited to financial accounts, they highlight the growing exposure of personal information and login credentials online.
Fraudsters often use phishing links, impersonation and other social-engineering tactics to trick people into revealing sensitive information such as passwords, OTPs, BVN or NIN details.
To help users strengthen the security of their accounts, PalmPay provides a range of built-in protection tools. One of these is the Transaction Guard.
The feature enables users to set single, daily, or monthly transaction limits. Whenever a transaction exceeds that limit, an additional verification step; facial verification- is required before it can be completed. This helps reduce the risk of unauthorized transfers, even if an account has been compromised.
Here’s how Transaction Guard helps keep your money safe:
- Keeps User in Control
The feature gives you greater control over your account by ensuring that higher-value transactions require your facial verification before they are processed. Transaction Guard requires facial verification before eligible transactions are completed, making it harder for unauthorized users to move your funds.
- Helps Mitigate Account Takeovers
Even if your login credentials or OTP are compromised, Transaction Guard helps limit potential losses by requiring an additional verification step that fraudsters cannot easily complete.
- Reduces the Risk of Fraud
By activating this security checkpoint, Transaction Guard helps protect users against common fraud attempts, giving them greater confidence when faced with scam attacks.
In a recent interview, Femi Hanson, Head of Marketing, PalmPay said: “Nigerians are increasingly embracing digital payments in their everyday lives hence maintaining trust and confidence of users must remain a top priority. Today, security is just as important as speed and convenience. That’s why PalmPa is continuously investing in solutions that give our customers greater control over their finances. Transaction Guard is one of those security features we’ve introduced to help users add an extra layer of protection to their accounts and mitigate fraud.”
How to Activate Transaction Guard
Activating Transaction Guard is quick and easy. Simply open the PalmPay app, go to Profile, tap Security Center, select Transaction Guard, switch it on, and complete the verification process.
As digital payments become embedded in everyday life, taking advantage of built-in security features can make a significant difference. By enabling Transaction Guard, PalmPay users can better protect their accounts and enjoy a safer, more secure digital banking experience.
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