In November 2024, Nigerians withdrew a substantial N364.38bn from banks, as cash scarcity gripped many regions of the country, according to the latest figures from the Central Bank of Nigeria’s Money and Credit Statistics.
The data also revealed a surge in currency outside banks, which rose by 8.5 percent month-on-month, reaching N4.65tn from October’s N4.29tn.
Furthermore, the CBN reported that total currency in circulation climbed to N4.88tn in November, representing a 7.2 percent increase (N328.91bn) compared to October.
These numbers highlight the persistent dominance of cash within the Nigerian economy, despite ongoing efforts to promote cashless transactions.
The November figure for currency outside banks reflected a striking 51 percent year-on-year growth from N3.08tn in November 2023.
Throughout 2024, the trend showed steady growth, starting at N3.28tn in January and peaking at N4.65tn in November.
Monthly data showed an increase to N3.41tn in February (4 percent rise), followed by N3.63tn in March (6.3 percent rise). April experienced a slight drop to N3.61tn but rebounded to N3.71tn in May (2.9 percent rise).
In June, it reached N3.79tn, before a decline in July to N3.67tn (3.3 percent drop). August saw a recovery to N3.87tn (5.5 percent increase), with continued growth in September (N4.02tn) and October (N4.29tn) before hitting the year’s high in November, attributed to heightened cash demand during the festive period.
Similarly, currency in circulation rose from N3.65tn in January to N4.88tn in November. February saw a modest increase to N3.69tn (1.2 percent rise), while March recorded a 4.8 percent rise to N3.87tn.
April noted a marginal drop to N3.92tn, but by May, it had recovered to N3.97tn. The trend continued upwards in June (N4.05tn), August (N4.14tn), September (N4.31tn), and October (N4.55tn), culminating in November’s peak of N4.88tn.
Despite these gains, Nigerians faced severe cash shortages by late 2024. Access to cash became challenging, with banks rationing withdrawals and ATMs frequently out of service.
This scarcity exacerbated economic difficulties, particularly during the holiday season.
In response, the CBN introduced measures to mitigate the crisis. Effective December 1, 2024, the apex bank directed customers to report cash access issues to their banks using state-specific contact numbers and email addresses.
It also mandated banks to prioritise over-the-counter and ATM cash disbursements, threatening penalties for non-compliance.
Reiterating that all denominations of the naira—old and redesigned notes—remain legal tender, the CBN sought to dispel public confusion.
Nevertheless, reports indicate that cash shortages persist, with withdrawal limits still affecting citizens across various regions.
November marked the highest percentage of currency held outside banks in 2024, with 95.4 percent of total circulation remaining outside financial institutions.
On average, 93.7 percent of the year’s currency was held in cash form, underscoring a deep-seated reliance on physical money.
Structural challenges, including insufficient banking infrastructure, low trust in digital payment systems, and inadequate financial inclusion in rural areas, drive this cash preference.
This trend significantly hampers the CBN’s ability to manage monetary policy effectively, limiting its control over inflation and liquidity.
