Cash Outside Nigeria’s Banking System Rises From N48.7 billion to N4.92trn in September

Cash held outside Nigeria’s banking system increased by N48.7 billion to N4.92 trillion in September 2026, reflecting the continued circulation of physical currency despite the Central Bank of Nigeria’s (CBN) efforts to promote digital payments and reduce dependence on cash.

Latest data from the CBN showed that the amount of cash held outside banks rose from N4.87 trillion in August to N4.92 trillion in September, representing a month-on-month increase of approximately one per cent.

The figure also represented a 10.3 per cent increase from the N4.47 trillion recorded in September 2025, indicating that the volume of cash circulating outside the banking system remained significantly higher than its level a year earlier.

The development comes as the apex bank intensifies efforts to deepen financial inclusion, expand digital payment infrastructure and encourage Nigerians to adopt electronic payment channels for everyday transactions.

A review of the monthly figures showed that cash outside banks increased from N4.45 trillion in August 2025 to N4.47 trillion in September before rising to N4.65 trillion in October.

The amount subsequently climbed to N5.41 trillion in December 2025 before declining to N5.25 trillion in January 2026.

Cash held outside the banking system remained above N5 trillion in February, April and May 2026, reaching N5.19 trillion in May before dropping to N4.92 trillion in June.

The figure recovered to N4.80 trillion in July and N4.87 trillion in August before recording another increase in September.

Despite the latest rise, the September figure remained below the levels recorded during several months in the first half of 2026, when cash outside banks exceeded N5 trillion.

CBN Targets Reduced Dependence on Cash

The increase comes against the backdrop of the CBN’s broader strategy to strengthen Nigeria’s payment system and reduce reliance on physical currency.

At the launch of the Nigeria Payment System Vision 2028 in Abuja, CBN Governor, Olayemi Cardoso, outlined plans to build on the country’s progress in digital payments while accelerating the development of a more inclusive, efficient and technology-driven financial system.

Under the roadmap, the apex bank is targeting a reduction in cash held outside banks to below 40 per cent of total currency in circulation.

The CBN is also aiming to achieve financial inclusion for 95 per cent of Nigeria’s adult population by 2028, reflecting its commitment to expanding access to formal financial services.

Nigeria’s digital payment ecosystem has expanded considerably over the past decade, supported by financial technology companies, mobile money operators, instant payment platforms and digital banking services.

These developments have provided individuals and businesses with alternatives to physical cash for transferring funds, paying bills, purchasing goods and conducting other financial transactions.

The CBN’s latest roadmap seeks to consolidate these gains by strengthening payment infrastructure, improving access to digital financial services and encouraging wider adoption of electronic transactions across the economy.

Physical Cash Remains Significant Despite Digital Payment Growth

The September figures underscore the continued importance of physical cash in Nigeria’s financial system, even as electronic payment channels become increasingly available.

Cash held outside banks represents currency in the hands of individuals, businesses and other holders outside the banking system. Changes in the figure can reflect various factors, including cash withdrawal and deposit patterns, seasonal demand, business transactions and the public’s preference for holding physical currency.

However, an increase in cash outside banks does not necessarily mean that Nigerians are using digital payment channels less frequently.

The CBN’s cash-outside-banks data measure the amount of physical currency held outside the banking system, rather than the volume or value of electronic transactions conducted during the period.

Consequently, the latest increase does not, on its own, establish whether the adoption of digital payments has slowed or whether consumers and businesses are shifting away from electronic transactions.

Nevertheless, the figures highlight the challenge facing monetary authorities as they seek to balance the continued demand for physical currency with efforts to modernise the country’s payment system.

The CBN’s target of reducing cash outside banks to below 40 per cent of total currency in circulation will therefore remain an important indicator of progress under the Nigeria Payment System Vision 2028, alongside its broader objective of achieving 95 per cent financial inclusion by 2028.