In a recent release of e-payment data by the Nigeria Inter-Bank Settlement System (NIBSS), Nigeria has witnessed a significant surge in active bank accounts, reaching a staggering 151 million in 2022, reflecting a 13% increase from the previous year’s record of 133.5 million.
The latest figures unveiled by the NIBSS delineate that individual accounts constitute a significant majority, comprising 96.6% of the total active accounts, totaling 146 million, with the remainder being corporate accounts.
The report further reveals a notable upsurge in both current and savings accounts. Current accounts witnessed a robust growth of 14%, escalating to 56.9 million in 2022 from 49.8 million in 2021. Similarly, savings accounts displayed a substantial rise of 16%, surging to 139.2 million in 2022 from 120.4 million the preceding year.
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However, amidst the buoyancy in active accounts, a concerning trend of inactive bank accounts has emerged. As of December 2022, the number of inactive bank accounts reached 72.8 million, marking a significant increase from the 57.9 million recorded at the end of 2021. This signifies a 26% surge or an additional 14.9 million inactive accounts within the year.
Industry analysts attribute this surge in inactive accounts to multifarious economic factors plaguing the country. These include soaring prices of goods and services, stagnant incomes juxtaposed with dwindling purchasing power, escalating unemployment rates, and emigration, among other challenges.
While the surge in active bank accounts ostensibly indicates progress toward financial inclusion and banking penetration, the burgeoning number of inactive accounts poses significant economic concerns. Inactive accounts, defined as those with no transactions for over 12 months, not only impede the efficiency of the banking sector but also signal underlying economic challenges.
The proliferation of inactive accounts underscores the stark reality of economic disenfranchisement faced by a substantial segment of the population. Despite the nominal increase in the number of account holders, the broader narrative of economic growth remains elusive, as reflected by persistent unemployment, income disparities, and inflationary pressures.
Moreover, the conversion of inactive accounts into dormant status by banks marks the need for prudent risk management practices. Banks are compelled to mitigate potential fraud risks associated with dormant accounts, thereby diverting resources away from productive investment avenues.
While the surge in active bank accounts signifies strides toward financial inclusion, the persistence of a large number of inactive accounts underlines the imperative for holistic economic reforms.
Nigeria’s headline inflation has peaked at 29%, with food inflation rising above 33% in some states.
Experts have urged the government to address underlying economic challenges such as unemployment, inflation, and income inequality which are paramount to fostering sustainable economic growth and realizing the true potential of Nigeria’s banking sector.