Currency held outside the banking system by Nigerians surged by 103.8 per cent to N4.923 trillion in September 2026, up from N2.416 trillion in September 2023, according to data released by the Central Bank of Nigeria (CBN). This significant increase highlights the persistent demand for physical cash within the economy, despite the ongoing expansion of electronic payment channels across the country.
The CBN’s Money and Credit Statistics indicate that cash held outside banks has more than doubled in three years. Year-on-year, currency outside banks increased by 10.3 per cent, rising from N4.465 trillion in September 2025 to the current N4.923 trillion. The trajectory of this growth shows a sharp initial jump of 66.2 per cent between September 2023 and September 2024, when figures reached N4.016 trillion, followed by a 11.2 per cent rise to N4.465 trillion in September 2025.
Analysts cite cash dependence and inclusion challenges
Experts suggest that the latest figures reflect the scale of currency demand and the challenges facing efforts to deepen the use of formal banking and electronic payment systems. Analysts note that the preference for cash transactions remains significant, notwithstanding the growing adoption of mobile banking, electronic transfers, point-of-sale terminals, and other digital payment platforms in Nigeria.
“The simultaneous increase in demand deposits and currency outside banks points to the coexistence of formal banking balances and substantial demand for physical cash in Nigeria’s payment system,” said Clifford Egbomeade, an Economic and Communications expert. “However, the two indicators measure different components of monetary activity. Demand deposits represent bank-account balances, while currency outside banks represents cash held outside the banking system.”
Egbomeade further cautioned that the growth rates of these indicators alone do not establish how much of the increase in cash holdings is attributable to economic growth, inflation, informal transactions, or changes in payment preferences.
While cash holdings have risen sharply, the CBN data also shows that demand deposits in the banking system increased by 70.8 per cent over the same three-year period, reaching N39.124 trillion in September 2026 from N22.903 trillion in September 2023. Demand deposits, which are funds held in bank accounts accessible for payments and withdrawals on demand, grew by 12.9 per cent year-on-year, rising from N34.642 trillion in September 2025 to N39.124 trillion in September 2026.
<small>Source: Vanguard News — read the original story there.</small>
