CBN Targets N2.83tn Cash in Circulation as Nigeria Pushes Cashless Economy Ahead of 2027 Elections

The Central Bank of Nigeria (CBN) has announced a bold plan to pull about N2.83 trillion in cash currently outside the banking system back into formal financial channels, as part of its new Nigeria Payments System Vision 2028. The initiative, unveiled in Abuja by CBN Governor Olayemi Cardoso, is designed to deepen digital payments, reduce cash dependency, and strengthen Nigeria’s financial ecosystem ahead of major economic and political transitions.

At the heart of the strategy is a major push to expand financial inclusion to 95 per cent by 2028, bringing an estimated 50 million more Nigerians into the formal financial system. According to Cardoso, the goal is not just about banking access but about economic empowerment. He stressed that efficient payment systems can play a direct role in reducing poverty, improving trade, and strengthening national growth.

The plan also targets Nigeria’s heavy reliance on physical cash, especially as currency outside banks currently stands at over N5 trillion, representing the bulk of cash in circulation. The CBN aims to reduce this share to below 40 per cent, a move that would significantly improve monetary policy effectiveness and strengthen liquidity in the banking sector. Analysts note that if achieved, this shift could reshape how money flows through Nigeria’s economy.

The timing of the policy is notable, coming months before the 2027 general elections, a period often associated with concerns over cash-driven politics, vote buying, and inflationary pressure. CBN officials have warned that election-related spending could destabilize recent economic gains. Cardoso, however, insisted that “cash should no longer be king,” calling for stronger trust in digital payment systems and financial technology.

Beyond cash reduction, the vision is built on five pillars including digital infrastructure, financial inclusion, innovation, cross-border payments, and cybersecurity. Stakeholders such as regulators, telecom operators, banks, and fintech companies have pledged support, describing the initiative as a critical step toward positioning Nigeria as a leading digital payments hub in Africa. The CBN maintains that success will depend not just on policy design, but on execution and collaboration across the entire financial ecosystem.

source: punch