By Anastasia John E.
Nigerians withdrew N364.38 billion from banks in November 2024 amid widespread cash scarcity, according to the latest data from the Central Bank of Nigeria (CBN) Money and Credit Statistics.
The CBN reported that currency outside banks surged to N4.65 trillion in November, up from N4.29 trillion in October, reflecting an 8.5 percent month-on-month increase. Additionally, the total currency in circulation climbed to N4.88 trillion, marking an increase of N328.91 billion, or 7.2 percent, compared to the previous month.
These figures underscore the persistent reliance on cash within the Nigerian economy, despite ongoing efforts to promote cashless transactions.
The November figure for currency outside banks represents a significant 51 percent year-on-year growth compared to N3.08 trillion in November 2023. Throughout 2024, cash outside banks has shown consistent growth, starting at N3.28 trillion in January and peaking in November.
In February, the figure rose to N3.41 trillion, a four percent increase from January, and further climbed to N3.63 trillion in March, reflecting a 6.3 percent increase. April saw a slight decline to N3.61 trillion, but it rebounded to N3.71 trillion in May, with a 2.9 percent increase. By June, currency outside banks rose to N3.79 trillion, a 2.2 percent increase, before slightly declining to N3.67 trillion in July, reflecting a 3.3 percent drop.
However, August recorded a recovery to N3.87 trillion, up by 5.5 percent, while September and October continued the upward trend, reaching N4.02 trillion and N4.29 trillion, respectively. The November peak of N4.65 trillion marked the highest figure for 2024, attributed to increased cash demand during the festive season.
Currency in circulation followed a similar trajectory, rising steadily from N3.65 trillion in January to N4.88 trillion in November. In February, the figure increased to N3.69 trillion, a 1.2 percent month-on-month rise, and further climbed to N3.87 trillion in March, reflecting a 4.8 percent increase. After a slight decline to N3.92 trillion in April, it rebounded to N3.97 trillion in May. By June, currency in circulation rose to N4.05 trillion, while July recorded a minor decline to N4.05 trillion. August and September saw further increases to N4.14 trillion and N4.31 trillion, respectively, with October rising sharply to N4.55 trillion before peaking at N4.88 trillion in November.
Despite these increases, Nigeria faced significant cash shortages toward the end of 2024, with reports indicating widespread difficulties in accessing cash. Many banks resorted to rationing withdrawals, and ATMs were frequently out of service, compounding economic hardships for citizens, particularly during the festive season.
In response to the shortage, the CBN implemented measures to improve cash availability. Effective December 1, 2024, the apex bank directed customers to report difficulties in accessing cash directly to their banks through state-specific contact numbers and email addresses. The CBN also instructed Deposit Money Banks to prioritize cash disbursements over the counter and via ATMs, warning that institutions failing to comply would face penalties.
These measures aim to ensure sufficient cash supply and address operational inefficiencies within the banking system. The CBN has emphasized that all denominations of the naira, including both old and redesigned notes, remain legal tender, clarifying public confusion over the validity of older naira notes.
Despite these interventions, reports indicate that cash shortages persist, with limited withdrawal limits still affecting many areas. In November, 95.4 percent of the total currency in circulation was held outside banks, the highest percentage recorded this year. This trend highlights the continued preference for cash transactions, averaging 93.7 percent throughout 2024.
The reliance on cash underscores structural issues such as limited banking infrastructure, low trust in digital payment systems, and inadequate financial inclusion, particularly in rural areas. The dominance of cash poses significant challenges for Nigeria’s monetary policy, as a large volume of currency outside banks hampers the CBN’s ability to manage inflation and liquidity effectively.
