Nigeria’s cash scarcity crisis continues to plague its financial landscape, even as the amount of currency outside banks has seen a sharp increase of N1.59 trillion year-on-year, according to data from the Central Bank of Nigeria (CBN). This phenomenon underscores the nation’s reliance on physical cash, creating hurdles for the implementation of a modernized cashless economy.
The data highlights that in October 2024, N4.29 trillion, or 94.3% of the total currency in circulation, remained outside the formal banking system. This marked a significant 59% rise compared to October 2023, when N2.70 trillion (89.6%) was held outside banks. Month-on-month comparisons also show a steady increase in unbanked cash, with N270 billion added between September and October 2024 alone.
This trend persists despite efforts to promote cashless transactions. Over the past year, reliance on physical cash has grown, with more than 90% of the currency consistently held outside banks. In August 2024, for instance, 93.3% of the total currency (N3.87 trillion) was outside the banking system, while in July 2024, it was 90.5%.
The scarcity of cash stems not just from hoarding but also from systemic inefficiencies. According to Olusoji Oluwole, President of the Association of Senior Staff of Banks, Insurance, and Financial Institutions, the CBN’s inability to adequately supply cash to commercial banks exacerbates the crisis.
Moreover, the hawking of mint naira notes at exorbitant prices has compounded the problem. Despite regulations, this illicit trade continues, with Nigerians struggling to access cash in banking halls and ATMs. In response, the CBN has implemented strict penalties, including a fine of N150 million per branch on deposit money banks found guilty of supplying mint naira notes to hawkers. Mystery shoppers and periodic spot checks have been deployed to uncover and penalize offenders, as stated in a circular issued on December 13, 2024.
Addressing this issue requires a multi-faceted approach. The CBN must strengthen cash distribution mechanisms, enforce regulations against illicit practices, and foster public trust in digital transactions. Concurrently, Nigerians need better financial education to embrace alternatives like mobile banking and e-payment platforms.
The persistence of cash scarcity amid growing currency circulation reflects deeper structural issues in Nigeria’s financial ecosystem. Without decisive action, the country risks stalling its transition to a more efficient and inclusive cashless economy.
I dont buy it! Maybe people are just hoarding cash under their mattresses. Lets dig deeper into this cash scarcity issue.
I think the solution is to switch to a barter system instead of relying on cash. Its time for a change!
I dont get the big deal about cash scarcity in Nigeria. Just use digital payments like everyone else! #ProblemSolved 💸✨
I believe the solution lies in going cashless! Embrace digital payments and leave cash scarcity behind. Whos with me? 💳💰📲
No thanks, cash is still king for many. Digital payments have their own risks.
I dont buy it! Maybe the real issue is mismanagement of funds, not just the lack of cash. Lets dig deeper.
I find it hard to believe that cash scarcity is a real issue in Nigeria with all the money circulating. Something doesnt add up here.
I think the solution is simple – just print more money! Problem solved, right? Whos with me? Lets make Nigeria rich!
I think we should switch to a barter system instead of relying on cash. Its more sustainable and fosters a sense of community.
I think the solution to cash scarcity in Nigeria is to switch to a cashless society. Embrace digital payments for a more efficient economy!
I think the solution is to switch to a barter system. Who needs cash anyway? Lets trade chickens for groceries!
I think the solution to cash scarcity in Nigeria is to switch to a completely digital currency. What do you all think?
I think the solution is simple: just go cashless! Digital payments are the future, lets embrace it for a cash-free Nigeria.
Cashless doesnt work for everyone. Lets consider those without access to digital payments.
I think the solution is to switch to a barter system. Who needs cash anyway? Lets trade goats for groceries!
I disagree with blaming the government for cash scarcity in Nigeria. Maybe people need to embrace digital payments more.
I think the government should just switch to a barter system. Who needs cash anyway? Lets trade chickens for goods!
I think its time we ditch physical cash altogether and go fully digital. Who needs paper money anyway? #cashlessrevolution 💳
Physical cash is essential for financial inclusion and privacy. Digital isnt always the answer. #cashisimportant 💵
I think the solution to cash scarcity in Nigeria is to switch to a barter system. Who needs cash anyway? 😂🤷♂️
I dont think cash scarcity in Nigeria is a big deal. People should just embrace digital payments and move on.
Not everyone has access to digital payments. Cash scarcity affects many in Nigeria.
I dont buy it! Cash scarcity in Nigeria? Maybe its just mismanagement and corruption. What do you think?
You might have a point. Corruption could definitely be a major factor here.
I think the solution is to go back to a barter system! Who needs cash anyway? Lets trade goats for groceries.
I think the solution to cash scarcity in Nigeria is to switch to a completely digital currency system. Who needs physical money anyway?
I believe the government should just switch to a cashless system already. Its 2021, time to embrace digital payments!
I think the solution is to switch to a barter system. Who needs cash anyway? Lets trade goats for groceries!