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By Daniel Adaji
Currency held outside Nigeria’s banking system remained above N4.5tn for the third consecutive month, according to data from the Central Bank of Nigeria (CBN) obtained by pointblanknews.com on Monday.
The figures which cover th period February to April 2025, show only a slight decrease in April. Currency outside banks stood at N4.57tn in April, down from N4.59tn in March, but still higher than N4.51tn recorded in February.
Despite this dip, the persistent hold above N4.5tn indicate Nigerians continued preference to keep cash outside the formal sector.
CBN data also shows that Nigeria’s total money supply (M3) rose from N110.7tn in February to N114.2tn in March and further to N119.1tn in April.
Money supply (M2), which excludes CBN bills, followed a similar upward trend: N110.69tn in February, N114.2tn in March, and N119.08tn in April.
Quasi money, which includes savings and time deposits—grew from N72.98 trillion in February to N75.65tn in March, reaching N78.07tn in April.
Narrow money (M1), comprising currency outside banks and demand deposits, also increased monthly. It rose from N37.71tn in February to N38.55yn in March, and hit N41.01tn in April.
Demand deposits climbed steadily from N33.2yn in February to N33.96tn in March and N36.44tn in April.
The amount of CBN bills held by money-holding sectors nearly doubled in two months, from N10.77bn in February to N20.8bn in March and N22.93bn in April.
Despite CBN push for a cashless economy, many Nigerians continue to rely on cash, largely due to fears of scarcity as experienced in the lead-up to the 2023 general elections. During that period, cash racketeering became rampant in banks and marketplaces. At some points, a withdrawal of N10,000 attracted fees as high as N2,000.
Despite assurances from the government that old naira notes remain valid, many citizens remain skeptical about depositing their money in banks.
Others, like Ojochegbe Michael, attribute their reluctance to the high charges imposed by banks and Point of Sale (POS) operators. Instead, they prefer to restock their shops using available cash rather than through bank transfers.
“Banks charge so much for deposits and withdrawals, and they don’t always give enough cash when needed. My business requires cash, so I don’t bother going to the bank unless a customer insists on transferring money to my account,” she said.
Analysts believe that the volume of money held outside the banking system could hinder the effectiveness of the government’s monetary policies. They suggest increased awareness and improved internet and banking penetration in underserved communities as part of the solution.