Nigerians and other national living in the country prefer to hold on to their cash rather than keep them in the banks, according to the data released by the Central Bank of Nigeria, CBN.
Meanwhile, Nigeria’s total money supply rose to over N114 trillion in March , a 24 percent increase compared to the same period in March 2024.
According to the CBN’s Money and Credits Statistics, the total value of currency outside the banking system rose to N4.6 trillion in March 2025, amounting to 92 percent out of the N5 trillion in total currency in circulation within the period.
Compared to the same period in 2024, the development marks a significant difference considering that N3.63 trillion was held outside banks of the N3.87 trillion in circulation during the period.
Analysts insist that the development points to the fact that the cashless economic policy of the apex bank is not close to success yet, as the sentiment against the policy is still very high among Nigerians and other nationals who have made cash their kings.
The decision to hold on to cash may not be totally unfounded, analysts said considering the challenges faced in the recent past to get access to physical cash. It will take sometimes for the sentiment to change, according to close watchers of the financial sector, who said the CBN must do more to assure Nigerians that the problems of cash glut has been finally nipped in the bud.
Citing the recent CBN directive to commercial banks and other financial institutions, OFIs, to ensure that cash are available in their ATMs for Nigerians who need cash to meet their transactions, they insist that the fintechs must be made to improve their systems through cutting edge technology for efficient and fast transactions on their platforms, this way the preference for cash will gradually become a thing of the past, as internet banking takes the lead as the preferred way of transacting money-based transactions.
The CBN had on February 10 urged commercial banks in the country to ensure that their customers have access to cash at their ATMs. The directive followed the upward review of ATM transactions fees by the apex bank, which the CBN said was necessary to assist the banks to deal with the operational costs
Under the new regime which took effect from March 1, withdrawals from one’s bank ATMs will remain free of charge. However, customers using ATMs of other banks will be subjected to a charge of N100 per withdrawal of N20,000 or less at on-site ATMs, which are located within or directly affiliated with a bank branch.
Off-site ATMs, which are positioned outside bank premises such as shopping malls, fuel stations, and other public spaces, will attract an additional surcharge of up to N500 per transaction. For international ATM withdrawals, charges will be based on cost recovery, meaning customers will bear the exact fee applied by the international acquirer. CBN later revealed that Nigerians withdrawing less than N20,000 from another bank’s Automated Teller Machine will still be charged a fee of N100 per transaction.
9Acting Director, Financial Policy and Regulation Department, John Onoja who later spoke on the ATM transaction fees debunked reports that CBN was trying to reduce the cash in circulation, saying there are other instruments available to the CBN to mop up cash in line with its monetary policy per time.
“It’s also one side on the part of the financial institution, so that they’ll be able to also keep up with the cost of doing business and then offer value services to the customers, and also on the side of the customer, it is to be sure that they’re going to have very quality service and value-added services from their bankers.”
Adding, “There are professional ways of dealing with excess liquidity in this system in Nigeria. The CBN, as the apex monetary policy body in Nigeria, has different tools to deal with that. So, if it is to reduce cash in circulation as a result of inflation and all of that. I’m sure the Central Bank has better tools to use and is not going through the ATM issues. So, it is not in any way to reduce money in circulation. Rather, it is to even make the money available to those who need it. We all know that the other channels that are available to customers and those who do business to transact, the electronic channels, are there. It’s important to ensure those who are especially in the remote areas, those who come to the ATMs and don’t find cash, are assured that banks provide cash at the ATMs so that you, as a customer, can go to the machine and get cash. It’s in no way an attempt to reduce cash.” (The Source)
