Recent data released by the Central Bank of Nigeria (CBN) has revealed a notable spike in currency outside the banks during the month of November 2023, reaching unprecedented levels based on historical records.
According to the Money and Credit Statistics data from the apex bank, the total currency in circulation (CIC) for November amounted to N3.35 trillion, while currency outside the banks is N3.08 trillion, constituting a significant 92 per cent of the overall CIC.
This clearly surpassed the previous record of N2.73 trillion in currency outside banks, reported in September 2022, representing 85 per cent of the N3.2 trillion CIC. This earlier peak had prompted the Central Bank to implement the naira redesign policy in a bid to curtail the increase of currency outside banks as well as currency in circulation.
A breakdown of the eleven-month trend reveals fluctuations in both CIC and currency outside banks. In January 2023, CIC was N3.29 trillion, followed by February at N982 billion, March at N1.68 trillion, April at N2.38 trillion, and May at N2.53 trillion.
June saw a slight increase to N2.6 trillion, with a marginal dip to N2.59 trillion in July. August witnessed an uptick to N2.66 trillion, another rise to N2.76 trillion in September, and an increase to N3.01 trillion in October, culminating in the November peak at N3.35 trillion.
The breakdown of currency outside banks for the same period ranged from a low of N792 billion in January, a slight increase to N843 billion in February, a reversal in March to the overturn of the policy to N1.45 trillion, a further rise to N2.07 trillion in April, and N2.18 trillion in May. June recorded N2.26 trillion, July N2.21 trillion, August N2.22 trillion, September N2.42 trillion, October N2.7 trillion, and a continued upward trend to N3.08 trillion in November 2023.
Notably, November 2023 marked the highest recorded levels for both currency in circulation and currency outside banks. The percentage of money outside the banks concerning CIC also reached a peak of 92 per cent.
Analysts believe the surge in cash outside banks emphasizes the need for decisive action, “Addressing the underlying factors driving this phenomenon is imperative, necessitating a sustainable approach to encourage the widespread adoption of electronic banking.”
