Nigeria’s banking industry has renewed calls for a balanced approach between cash and digital transactions, as data shows a sharp 97 per cent rise in currency in circulation over the past five years.
According to figures from the Central Bank of Nigeria (CBN), cash in circulation rose to ₦5.7 trillion in December 2025, up from ₦2.9 trillion in 2020. On a month-on-month basis, it increased by 8.9 per cent from ₦5.26 trillion in November 2025. Currency held outside the banking system also surged by 116.7 per cent to ₦5.4 trillion over the same period.
The Committee of Heads of Bank Operations (CHBO), which represents senior executives of deposit money banks, said the figures highlight the continued relevance of physical cash, even as electronic payments expand rapidly.
Speaking at the CHBO annual conference in Lagos, Olayemi Cardoso, CBN Governor, said digital channels remain critical to improving access to cash and reducing pressure on branches, ATMs, and point-of-sale terminals. Represented by Fatai Karim, his Special Adviser, Cardoso disclosed that the apex bank is preparing a new policy to improve efficiency and accountability in cash management, including a review of ATM deployment and card issuance.
“Cash is increasing, but electronic transactions are also rising. This confirms that cash remains very important, especially for informal markets, rural communities, and small businesses,” he said.
CHBO Chairman, Abraham Aziegbe, noted that network failures and infrastructure gaps continue to drive spikes in cash usage. He cited CBN data showing that ATM withdrawals jumped to ₦36.34 trillion in the first half of 2025, from ₦12.21 trillion in the same period of 2024.
“This is not a relic of the past. Cash remains a cornerstone of resilience and trust in the financial system,” Aziegbe said, adding that the industry’s focus should be on modernising cash and integrating it more efficiently with digital channels.
Also speaking, Lloyd Onaghinon, Managing Director of Bankers Warehouse PLC, warned that the growing volume of cash outside the banking system poses risks to financial intermediation. He noted that after dropping to about ₦900 billion during the naira redesign in early 2023, cash in circulation has rebounded to around ₦5 trillion.
“What is required is not a radical shift, but a balanced and well-sequenced approach,” he said, stressing that Nigeria’s experience mirrors trends seen even in advanced economies.
Bankers agreed that the future of Nigeria’s financial system lies not in choosing between cash and digital payments, but in ensuring both work together to support inclusion, stability, and growth.
