Despite efforts to drive financial inclusion and promote cashless transactions, a significant portion of the country’s money supply remains outside regulated channels.
Data from the Central Bank of Nigeria (CBN) has shown that the currency in circulation has reached an all-time high of N4.1trillion as of August 2024.
The report also revealed that currency outside the banks grew to N3.86 trillion in the month under review, which indicates that 93.34 per cent of the nation’s currency is in the hands of individuals and businesses, while only 6.66 per cent remains within the banking sector.
This trend highlights a persistent challenge for Nigeria’s formal banking system.
Despite efforts to drive financial inclusion and promote cashless transactions, a significant portion of the country’s money supply remains outside regulated channels.
Daily Trust reports that according to the data, a steady increase in currency in circulation, growing from N4.05 trillion in the previous month of July to N4.1 trillion in August, according to the Apex Bank’s Money and Credit Statistics.
The Central Bank of Nigeria (CBN) had in August reported that the currency in circulation surged to an unprecedented N4.05 trillion in July 2024, marking an all-time high.
According to the CBN’s Money and Credit Data, this figure represents an 11.05 per cent increase since the beginning of the year and a significant 56.17 per cent rise compared to the same period in 2023.
Analysis of the data revealed that the year began with N3.65 trillion in circulation in January 2024, a stable figure reflecting a typical post-holiday economic environment.
February saw a modest rise to N3.69 trillion, a 1.18% increase from January, while March recorded a more substantial jump to N3.87 trillion, marking a 4.76 per cent month-on-month increase.
The upward trend persisted in April, with the currency in circulation hitting N3.92 trillion, up by 1.39 per cent from March, driven by heightened consumer spending during the Easter period.
May and June continued this trajectory, with the currency in circulation reaching N3.97 trillion in May and peaking at N4.04 trillion in June, representing monthly increases of 1.07 per cent and 2.11 per cent, respectively.
