The total value of currency held outside Nigeria’s banking system in March rose to ₦4.6 trillion, representing 91.9% of the ₦5.00 trillion total currency in circulation.
According to the latest money and credit statistics released by the CBN, ₦4.6 trillion was held outside the banking system in March 2025, accounting for 91.9% of the total ₦5.00 trillion currency in circulation.
This underscores Nigeria’s continued reliance on physical cash despite ongoing efforts to promote a cashless economy.
The figure marks a sharp increase from March 2024, when ₦3.63 trillion was outside the banks out of ₦3.87 trillion in total circulation.
The new figures represent a 26.7% year-on-year increase in currency held outside banks and a 29.3% rise in total currency in circulation.
The March 2025 data highlights a persistent trend: Nigerians continue to favour physical cash over formal banking channels. Between February and March, currency outside banks rose slightly from ₦4.52 trillion to ₦4.60 trillion, while total currency in circulation dipped marginally from ₦5.04 trillion to ₦5.00 trillion.
As a result, the share of currency outside the banking system climbed to 91.9%—its highest level in five months.
The increased circulation of physical cash coincides with mounting inflationary pressure.
According to the National Bureau of Statistics, headline inflation rose to 24.23% in March 2025, up from 23.18% in February.
On a month-on-month basis, inflation jumped by 3.90%, nearly double February’s rate of 2.04%, indicating a sharp acceleration in consumer price increases.
Nigeria’s informal economy—estimated to contribute over 50% of GDP—remains heavily dependent on physical cash.
Factors such as limited digital literacy, weak network infrastructure, and low trust in banking platforms continue to drive this preference. Many consumers view electronic transfers as unreliable, frequently citing issues like delays, failed reversals, and ATM downtimes as persistent frustrations in daily transactions.
Despite the rapid growth of fintech and strong policy backing for electronic payments, physical cash remains deeply rooted in Nigeria’s economic and cultural landscape.
Without substantial improvements in trust, infrastructure, and financial literacy, the vision of a truly cashless economy may continue to face significant obstacles.
