More Nigerians are becoming poorer on daily basis due to partly structural economic weaknesses, dependence on oil revenues and national fragility.
Upon assumption of office on May 29, 2023, President Bola Tinubu’s administration implemented some bold economic reforms such as the removal of fuel subsidies and floating of the naira, which have spiked inflation rates, devaluation of the local currency, Naira, as well as increased hardship.
Not even some palliative measures, through the establishment of humanitarian and poverty alleviation ministry, such as cash transfers, schoolfeeding programs alleviated the sufferings of the citizens, but rather, became another dtsin pipes on the economy.
Nigeria’s annual inflation rose slightly to 24.23% in March 2025, from 23.18% in the prior month, which was the softest since June 2023. Food inflation, the largest component of the inflation basket, remained elevated but eased to 21.79% from 23.51% in the prior month. The core inflation, which excludes the prices of volatile agricultural products and energy, quickened to 24.43%, from 23.01% in the previous month. Monthly, consumer prices rose by 3.90% in March, accelerating from 2.04% in February.
Indeed, the World Bank, in one of its recent reports said, “Multiple shocks in a context of high economic insecurity have deepened and broadened poverty. Since 2018/19, an additional 42 million people fell into poverty, so that more than half of all Nigerians (54 per cent) are estimated to live in poverty in 2024, based on World Bank projections.
Curiously, amid these contending forces of poverty and insecurity, banks’ earnings, in recent times, have gone into billions and trillions, particularly through non -interest incomes, even, on the back of volatile macroeconomic enviroment.
Specifically, nine banks raked in N922.5bn from net fees and commission charges in 2024, from N576.1 billion in 2023, making a 60 percent jump from the prior year despite rising public frustration over surging transaction costs and service failures.
The development of record profits by leading deposit money banks, at a time several businesses report substantial losses, are considered by some analysts as as a kind of profit paradox.
This has sparked public debate, with many questioning the relevance of the financial intermediation role of the institutions, based on their exploitative practices.
Metrobusinessnews.com, gathered from the street, FTS) that the major sources of revenues embraced by banks, particularly, in recrnt times, include, fees, commissions, interest income from loans, government securities and trading activities.
High inflationary environment with interest rate peaking at 27.25, in 2024, for instance, created exploitative avenues for hefty charges on customer deposits, elevated lending rates, wider interest margins and off-balance sheet.
Consequently, banks invested their excess liquidity in government securities, such as Treasury Bills, with yields hovering around 20 percent, and in exceptional cases, of over 20 percent for a year.
The analysts say there is a kind of disconnect between a bank’s profitability and the country’s economic challenges, typified by increased poverty as the high charges and interest rates are impacting negatively on customers and businesses.
While admonishing the Central Bank of Nigeria, (CBN), on the need to ensure that banks’ practices align with economic development goals, they also advised the apex bank to be wary of seeing interest rate hike as the only antidote to rising inflation.
The analysts further argue that in the same enviroment,where Sterling Bank, for instance, recently introduced zero transaction charges, in an effort to deepen financial Ilinclusion in Nigeria, moves by other banks, including the leading ones in increasing charges and other unwholesome practises, according to them, should be of concern to the leadership of the country.
Sterling Bank has recently announced a customer-focused initiative to enhance its banking services, with the introduction of zero charges for all local online transactions by its customers.
With the move, Sterling Bank has taken a definitive stand against the long-standing practice of charging customers for everyday digital transfers.
However, the issue has become increasingly contentious as digital banking adoption continues to deepen.
Recently, some Nigerian commercial banks announced increment in SMS transaction alert fee to N6 effective from Thursday, May 1, 2025, over new tariffs.
One of the banks, Guaranty Trust Bank (GTBank), in a notice sent to customers, last week Wednesday, attributed the adjustment to a recent upward review in telecommunication rates by service providers.
“Please be informed that effective Thursday, May 1, 2025, the SMS transaction alert fee will increase from N4 to N6 per message. This adjustment is due to a recent increase in telecom rates as communicated by the telecommunication service providers,” the bank noted.
While the bank did not specify the exact telecoms involved or when the rate changes were communicated, it clearly tied the new charges to external telecom cost adjustments.
GTBank noted the importance of SMS transaction alerts for monitoring account activities and enhancing security, while also offering customers the option to opt out if preferred.
“Kindly note that transaction alerts are important and help you keep track and stay in control of activities on your account,” the bank said.
Also, Ecobank Nigeria announced a revision of its SMS notification charges, increasing the cost from N5 to N6 per message, effective May 1, 2025.
The bank said the upward review, communicated to customers via SMS, is attributed to new tariff structures.
The SMS alert system allows customers to receive real-time notifications of activities on their accounts, helping them monitor for any unauthorized or suspicious transactions.
Customers who no longer wish to receive transaction notifications via SMS are allowed to opt out.
A message from Fidelity Bank to customers last week read:
“Dear Valued Customer, Please be informed that due to an industry-wide increase in SMS costs by telecommunications providers, the charges for SMS transaction alerts have been revised from ₦4 to ₦6 per SMS effective today, May 1, 2025. This adjustment is necessary to ensure we continue delivering secure, timely, and reliable transaction notifications to you.
We assure you that Fidelity Bank will continue to provide value-added services and innovative solutions to enhance your banking experience.
Please note: SMS alerts sent to international phone numbers may attract higher charges.”
Other banks have since joined or planning to do so.
However, the worrisome aspect are the unsolicited messages including the end of month, from banks for which charges are made.
Further investigation shows that, while the banks are quick to deducting their charges from customers’ accounts revision of failed transaction, both the principal and charges, are usually cumbersome, to the extent that some customers have been losing cash, after months of failed attempts
Recall that Telecom operators in Nigeria, such as MTN, Airtel, Globacom, and 9mobile, have faced financial pressures due to rising energy costs, the depreciation of the naira, which have made importing infrastructure more expensive. Additionally, frequent disruptions to fibre-optic cables have led to substantial losses.
In response to these rising costs, telecom operators petitioned the Nigerian Communications Commission (NCC) for a 100% increase in tariffs. However, the NCC approved a more moderate 50% hike, aimed at balancing the financial sustainability of the operators with consumer affordability.
The approved 50% increase has had a noticeable impact on telecom pricing. Apart from the hike in SMS, data plans have also seen significant price hikes.
MTN’s 1.8GB monthly plan, for instance, increased from N1,000 to N1,500, while the 20GB plan saw a rise from N5,500 to N7,500.
On the other hand, Glo subscribers have decried the high rate, frequent reduction in the value of data purchased as well as non lasting of the airtime, development, some subscribers allege foul play by the organisation.
The analysts see action of the banks, regarded as agents of growth and development, in short changing customers, as capable of retarding the desired growth, which at the end, they argue, will impact negatively on their profitability and possibly, sustainability.JAMB: Mass Failure As Over 75% of UTME Candidates Scored Below 200
It is against the backdrop of about N922.5 billion earnings by about nine banks, basically from fees, against N576.1 billion in 2023, that exposes the sector’s increasing reliance on non-interest income, at the expense of real intermediation, typified by credit to the real sector of the economy.
More worrisome is the fact that the banks are also putting more burden on the customers through hidden and unexplainable charges on poor customer service.
For instance, Zenith with N206.87 billion in net fee and commission income, about 89.3 percent increase from N109.31 billion in 2023.
Understandably, the heavily Information Technology driven bank attributed the feat to growth in charges on electronic products, loan syndication, among others.
GTHCO, posted a 73.4 percent rise to N189.7 billion; Stanbic IBTC reported N170.39 billion. Fidelity Bank posted a 58 percent gain to N78.36 billion, more than double its fee earnings, to N62.17 billion.
Sterling HoldCo, which has currently waved local transfer charges, recorded lowest fee income of N32.41 billion, though represented about 24 percent.
Though customers are pushing back through complaints on Social Media about the excessive deductions, charges over failed transactions as well as unclear billings, the banks have continued with the exploitation.
For instance, GTbank has been in the eye of the storm, of late, over poor customer service, unclear charges as well as late responses from its staff.
According to a customer, “GTB charges even internal transfers within the bank. Recently, I authorised the bank to move some funds for investment in Treasury Bills. Can you imagine that about three charges were made from the transaction. When I inquired, the relationship manager insisted that the charges are normal and they have been making such charges for a very long time.The staff at some branches hardly take responsibility or attend to enquiries on time.”
