NIGERIA could face further cash-scarcity as the Central Bank of Nigeria (CBN) has warned that rise in cash held outside bank vaults has risen to N1.59 trillion year-on-year rise now totalling N4.29 trillion.
According to the apex bank’s money and credit statistics, over 90 per cent of the currency in circulation has remained outside formal financial institutions in 2024.
The data showed that by October 2024, currency outside banks had reached N4.29 trillion, making up 94.3 per cent of the total N4.55 trillion in circulation.
This marks a notable year-on-year increase of 59 per cent or N1.59 trillion, rising from N2.70 trillion in October 2023, when 89.6per cent of the total currency was outside banks.
Month-on-month, the amount of currency outside banks rose by 6.8per cent or N270billion, from N4.02 trillion in September 2024.
In September, currency outside banks accounted for 93.1 per cent of the total N4.31 trillion in circulation. This represented a 66.3 per cent year-on-year increase from N2.42trillion in September 2023, when 87.5 per cent of the total currency was outside banks. The month-on-month rise was 3.8per cent.
This marked a 73.9per cent year-on-year increase from N2.22trillion in August 2023, when 83.6per cent of the total currency was held outside banks.
The trend continued in July 2024, with N3.67trillion outside banks, representing 90.5per cent of the total N4.05 trillion in circulation.
Despite efforts to encourage cashless transactions, the data highlights that Nigerians remain heavily dependent on cash, which may hinder the country’s move toward a more modern financial system.
Commenting on the development, the President of the Association of Senior Staff of Banks, Insurance, and Financial Institutions, Olusoji Oluwole, attributed the growing cash shortage across the country to the CBN’s failure to meet commercial banks’ cash demands.
The ICIR reported that the CBN imposed a fine of N150m per branch on Deposit Money Banks found guilty of enabling the illegal distribution of newly minted naira notes to currency hawkers and unscrupulous agents.
To ensure compliance, the apex bank stated that it would increase periodic spot checks in banking halls and ATMs while deploying mystery shoppers to uncover illicit cash hawking spots across the country.
The ICIR earlier reported CBN’s silence over the cash scarcity that has hit businesses in this 2024 yuletide season, across the country.
This has prompted the Point-of-Sales (PoS) transaction operators to adjust their charges to almost 100 per cent higher.
Last year, Nigerians suffered the same fate as cash scarcity and high cost as commercial banks continue to ration cash dispensing to consumers
Fatimah Quadri is a Journalist and a Fact-checker at The ICIR. She has written news articles, fact-checks, explainers, and media literacy in an effort to combat information disorder.
She can be reached at sunmibola_q on X or fquadri@icirnigeria.org