Cash Scarcity Looms as Currency Held Outside Banks Soars

Nigeria may face another wave of cash scarcity as the Central Bank of Nigeria (CBN) raises concerns over the rising volume of cash outside the formal banking system.  

Data from the apex bank’s latest money and credit report reveals that currency held outside bank vaults surged to ₦4.29 trillion by October 2024, representing 94.3% of the ₦4.55 trillion in total circulation. This marks a significant 59% increase, or ₦1.59 trillion, compared to October 2023, when ₦2.70 trillion, or 89.6% of total currency, was outside the banking system.  

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The figures underscore a reliance on cash, despite initiatives aimed at promoting digital and cashless transactions. Experts warn that such dependency could hamper efforts to modernise Nigeria’s financial system and exacerbate liquidity challenges in the economy.