Concerns Rise Over Cash Shortages in States ~ CBN

Concerns Rise Over Cash Shortages in States Despite Increased CBN Supply.

In several Nigerian states, including Bauchi, Borno, Kaduna, Kano, Kebbi, and Taraba, as well as some satellite towns around the Federal Capital Territory (FCT), there are increasing complaints from bank customers and Point of Sale (POS) operators about cash shortages. This shortage has become especially concerning as citizens prepare for the holiday season, sparking a higher demand for physical cash.

This recent cash scarcity has persisted for over a week, despite data from the Central Bank of Nigeria (CBN) indicating a total currency circulation of N4.14 trillion, with N3.87 trillion of that amount currently outside the banking sector. According to the CBN, 93.34 percent of Nigeria’s currency is held by individuals and businesses, while only 6.66 percent is within banks, highlighting the ongoing reliance on cash transactions across the country, particularly in the northern states.

The gap between the currency outside banks and the total money in circulation reflects the reliance on cash, especially in the northern regions, where digital banking services have yet to fully replace physical cash for daily transactions. Additionally, recent CBN data shows a notable increase in currency circulation, with a year-on-year rise of N1.48 trillion (55.8 percent) from N2.66 trillion in August 2023 to N4.14 trillion in August 2024.

Investigations have shown that northern states are the most affected by this shortage, partly due to the seasonal demand during the harvest period and the limited presence of financial institutions in rural areas, further straining access to cash for residents in these regions.