Nigeria is grappling with a persistent cash scarcity, despite a remarkable year-on-year increase of N1.59 trillion in the amount of currency held outside banks.
According to data from the Central Bank of Nigeria (CBN), as of October 2024, over 90% of the nation's currency remains outside formal financial institutions, with currency outside banks reaching N4.29 trillion, which constitutes 94.3% of the total currency in circulation.
This figure marks a significant increase from N2.70 trillion in October 2023, reflecting a 59% rise. The trend of cash being held outside banks has continued to grow month-on-month, with an increase of 6.8% or N270 billion since September 2024, when the amount was recorded at N4.02 trillion.
Despite efforts by the CBN to encourage cashless transactions, many Nigerians remain heavily reliant on cash, particularly as the festive season approaches, exacerbating the ongoing cash shortage.
Olusoji Oluwole, President of the Association of Senior Staff of Banks, Insurance, and Financial Institutions, attributed the worsening situation to the CBN's failure to meet the cash demands of commercial banks.
He emphasized that this inadequacy has left millions unable to conduct transactions, particularly in rural areas where small businesses are struggling.
The CBN has issued warnings against cash hoarding and has threatened penalties for banks that do not comply with its directives to ensure adequate cash availability.
However, reports indicate that many banking halls are still experiencing significant shortages, leading to long queues and frustration among customers.
As the situation unfolds, stakeholders are calling for immediate action from the CBN to address these pressing concerns and alleviate the strain on both banks and the public.
