Nigeria’s currency circulation escalated to N5.24 trillion, reflecting a 43.4% increase from N3.65 trillion in January 2024. The Central Bank of Nigeria (CBN) reported that N4.74 trillion, or 90.5% of this amount, was held outside the banking sector by individuals and businesses.
This trend indicates a growing reliance on cash transactions, despite efforts to promote digital payment methods. The CBN’s data for December 2024 was not disclosed, leaving a gap in understanding cash flow during the holiday season.
Over the past year, both total currency circulation and cash held outside banks have risen markedly. In November 2024, the total currency in circulation was N4.88 trillion, with N4.65 trillion (95.4%) outside bank vaults. By June 2024, these figures were N4.05 trillion and N3.79 trillion (93.9%), respectively.
The lack of December data is significant, as the festive period often leads to increased cash demand for travel, celebrations, and informal transactions, potentially further elevating the amount of currency outside the banking system.
Additionally, in January 2025, Nigeria’s inflation rate was reported at 24.48% year-on-year, following a rebasing exercise to reflect changes in consumption patterns. This high inflation rate may influence individuals’ preference for holding cash, as they navigate the economic landscape.
