The total value of cheque transactions across the country rose by 5.81 per cent, or N123.23 billion to N2.24 trillion in the first eight months of this year, compared with N2.12 trillion recorded in the same period of 2023, findings by New Telegraph show.
An analysis of data obtained from the Nigeria Interbank Settlement System (NIBSS) and the Central Bank of Nigeria (CBN) indicates that the value of cheque transactions stood at N288.75 billion in January 2024; N304.14 billion in February; N262.35 billion in March; N290.36 billion in April; N308.72 billion in May; N226.30 billion in June; N293.76 billion in July and N270.36 billion in August.
This means that the total value of cheque transactions, from January to August 2024, amounted to N2.24 trillion. While this figure, as earlier indicated, is higher than what was recorded for the corresponding period of last year, further analysis of the data shows that the value of cheque transactions maintained a downward trend in recent years.
Specifically, data obtained from the CBN shows that the total value of cheque transactions fell by 2.28 per cent to N15.25 trillion in 2022 compared with N15.61 trillion in the preceding year.
The data also indicates that the total value of cheque transactions dropped to N4.48 trillion in 2019 from N5.04 trillion and N5.38 trillion in 2018 and 2017, respectively.
However, analysts note that the decline in cheque usage is not peculiar to Nigeria but, rather, a global phenomenon, which is being driven by the widespread adoption of electronic payment channels.
For instance, the South African Reserve Bank announced in November 2020 that the country’s lenders would not accept any cheques for deposit or encashment after 31 December 2020.
This was after the Payments Association of South Africa (PASA) had noted that the Covid-19 outbreak was intensifying the decline in cheque usage in that country. Also, in its report titled, “Instant Payments – 2020 Annual Statistics”, the NIBSS stated:
“The Covid-19 pandemic changed the e-payments landscape, accelerating the adoption of instant payments as more people transitioned to electronic channels for funds exchange in the wake of governmentimposed lockdowns.”
Indeed, in a report released in 2016, NIBSS had predicted that: “We might witness the end of the cheque book by the year 2050.”
The company stated: “Globally, as the market share of cheques decline in the wake of increased adoption of contactless and real-time payments, a duopoly may likely develop in the non-cash market with cards and credit transfer (instant payments) dominating across most geographies.
“For instance, in the AsianPacific (APAC), China, South Korea and Australia recorded a 20 per cent drop in cheque usage although India recorded a 10.1 per cent increase in usage due majorly to her government’s demonetisation policy.
“In Nigeria, cheque transactions have continued on a downward spiral from its peak volume of 15.3 million in 2014 to 9 million in 2018. This is a -10 per cent CAGR over the five-year period; with a growth rate of -17 per cent when compared to 2017.
Although, the volume of cheque transaction is decreasing, it is fair to say that its use is still relevant, especially amongst larger value transactions, bill payments, and payroll transactions.”
In fact, findings indicate that analysts in Nigeria believe that the country’s banks will continue to accept cheques for some time to come.
The analysts cite the implementation of the Nigeria Cheque Standard (NCS) and Nigeria Cheque Printers Accreditation Scheme (NICPAS) Version 2, which commenced on April 1, 2021, as evidence that cheques are still likely to be in use in the country for the foreseeable future.
