By Kolawole Ojebisi
The Central Bank of Nigeria (CBN) has revealed how Nigerians withdrew N364.38bn from banks in November 2024 amid the cash scarcity witnessed in many parts of the country.
The latest data from the Money and Credit Statistics of the Central Bank of Nigeria revealed this development.
The apex bank also stated that currency outside banks surged to N4.65tn from N4.29tn in October, reflecting an 8.5 percent month-on-month increase.
The bank further stated that the total currency in circulation climbed to N4.88tn in November, up by N328.91bn or 7.2 per cent compared to the previous month.
These figures highlight the continued dominance of cash in the Nigerian economy despite sustained efforts to promote cashless transactions.
The November figure for currency outside banks represented a significant 51 per cent year-on-year growth compared to N3.08tn in November 2023.
Over the course of 2024, cash outside banks has shown consistent growth, starting at N3.28tn in January and peaking in November.
In February, the figure rose to N3.41tn, a four per cent increase from January, and further climbed to N3.63tn in March, reflecting a 6.3 per cent increase.
April saw a slight decline to N3.61tn, before rebounding to N3.71tn in May with a 2.9 per cent increase.
By June, currency outside banks rose to N3.79tn, a 2.2 per cent increase, before slightly declining to N3.67tn in July, reflecting a 3.3 per cent drop.
However, August recorded a recovery to N3.87tn, up by 5.5 per cent, while September and October continued the upward trajectory, recording N4.02tn and N4.29tn, respectively.
The November peak of N4.65tn marked the highest figure for 2024, attributed to heightened cash demand during the festive season.
Currency in circulation followed a similar trend, rising steadily from N3.65tn in January to N4.88tn in November.
In February, the figure increased to N3.69tn, a 1.2 per cent month-on-month rise, and further climbed to N3.87tn in March, reflecting a 4.8 per cent increase.
April saw a slight decline to N3.92tn, before rebounding to N3.97tn in May. By June, the currency in circulation rose to N4.05tn, while July recorded a minor decline to N4.05tn.
According to the CBN data, August and September saw further increases to N4.14tn and N4.31tn, respectively, while October rose sharply to N4.55tn before peaking at N4.88tn in November.
The apex bank stated that, “Despite these increases, Nigeria faced severe cash scarcity towards the end of 2024, as reports indicated difficulties in accessing cash across the country.”
“Many banks resorted to rationing withdrawals, and ATMs were frequently out of service. This scarcity compounded economic hardships for citizens, especially during the festive season.” CBN added.
To address the shortage, the CBN said it implemented measures to improve cash availability.
For example, on 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 prioritise cash disbursements over the counter and via ATMs, warning that institutions failing to comply would face penalties.
Despite these interventions, reports indicate that cash shortages persist, with limited withdrawal limits still affecting many areas.
In November, 95.4 per cent of the total currency in circulation was held outside banks, the highest percentage recorded this year.
This trend underlines the continued preference for cash transactions, averaging 93.7 per cent throughout 2024.
The reliance on cash highlights structural issues such as limited banking infrastructure, low trust in digital payment systems, and inadequate financial inclusion, especially in rural areas.
The dominance of cash poses significant challenges for Nigeria’s monetary policy. A large volume of currency outside banks reduces the CBN’s ability to manage inflation and liquidity effectively.
