Data from the Central Bank of Nigeria (CBN) reveals that the total currency in circulation has reached an all-time high of N4.1 trillion as of August 2024.
This figure represents a significant growth from the previous month, with currency outside the banks increasing to N3.86 trillion.
As a result, an overwhelming 93.34% of the nation’s currency is now held by individuals and businesses, while only 6.66% remains within the banking sector.
This situation poses ongoing challenges for Nigeria’s formal banking system, despite efforts to enhance financial inclusion and encourage cashless transactions.
The report indicates a steady increase in currency circulation throughout the year, with a remarkable 11.05% rise since the beginning of 2024 and a substantial 56.17% increase compared to the same period last year.
The year began with N3.65 trillion in circulation in January, with modest increases in February and March leading to a significant jump in April, reaching N3.92 trillion.
The trend continued, culminating in N4.04 trillion in June before hitting the record high of N4.1 trillion in August.
This persistent growth in currency circulation reflects changing economic conditions, particularly driven by increased consumer spending during festive periods.
However, the majority of money remaining outside of regulated banking channels underscores the ongoing challenge of promoting a more cashless economy in Nigeria.
The data highlights the need for continued efforts to address these issues and enhance the efficiency of the banking system.