Data from the Central Bank of Nigeria (CBN) reveals that a staggering 93.34% of the nation’s currency, amounting to N3.87 trillion, is currently outside the banking system, highlighting a significant reliance on cash transactions among individuals and businesses.
The total currency in circulation has reached N4.14 trillion, with only 6.66% remaining within banks. This trend poses ongoing challenges for Nigeria’s formal banking sector, as efforts to promote financial inclusion and cashless transactions struggle against the persistent preference for cash.
The CBN data indicates a notable year-on-year increase of 55.8%, with currency in circulation rising from N2.66 trillion in August 2023 to N4.14 trillion in August 2024. This marks a N1.48 trillion increase, reflecting a growing economy despite the rise of digital banking services.
In July 2024, the currency in circulation saw a slight increase to N4.05 trillion, up by N91.08 billion from the previous month. The year began with N3.65 trillion in circulation, indicating a moderate economic start, but subsequent months showed a steady upward trend, culminating in a peak of N4.04 trillion in June 2024.
CBN Governor Mr. Olayemi Cardoso, who took office in September 2023, noted the importance of ensuring sufficient cash flow within the system. He stated, “There’s no excuse for not having sufficient cash in the system,” emphasizing ongoing efforts to enhance cash availability and circulation velocity.
