Nigeria’s total currency in circulation hit a record high of N5.24 trillion in January 2025, reflecting a 43.5% increase from N3.65 trillion in January 2024, as reported by the Central Bank of Nigeria (CBN). This surge highlights a continued trend of rising cash circulation across the country, demonstrating growing reliance on cash transactions.

A significant portion of the currency, N4.74 trillion or 90.4%, was held outside the formal banking system. This indicates that most of the country’s currency remains in circulation outside banks, with individuals and businesses choosing cash over electronic alternatives. This proportion has been steadily increasing throughout 2024, rising from 89.9% in January 2024 to 90.4% by the end of January 2025.

The data reveals a consistent increase in currency circulation throughout 2024. From January 2024, where N3.65 trillion was in circulation, figures steadily grew, peaking at N4.88 trillion in November 2024. The amount of currency held outside banks followed a similar trajectory, with the highest proportion reaching 93.5% in June 2024. Despite minor fluctuations in the months that followed, the upward trend continued, culminating in the January 2025 figure.

This rise in currency outside the banking system is indicative of Nigerians’ ongoing preference for cash-based transactions, a trend that contrasts with global moves towards digital payments. As of January 2025, with N4.74 trillion held outside banks, Nigeria’s cash-based economy remains firmly entrenched, signaling possible challenges for the Central Bank’s efforts to encourage greater financial inclusion and digital banking adoption.

SOURCE: THISDAY