Nigeria's Cash Dependency Surges Despite Digital Payment Growth

Recent data from the Central Bank of Nigeria (CBN) reveals a significant rise in the amount of currency held outside the banking sector, which has surged by 103.8% over the past three years. As of September 2026, Nigerians held approximately N4.923 trillion in cash outside banks, a stark increase from N2.416 trillion recorded in September 2023. This trend highlights a persistent demand for physical currency, even as the country expands its electronic payment infrastructure.

Further analysis of the CBN’s Money and Credit Statistics indicates that the amount of currency outside banks has grown by 10.3% year-on-year, from N4.465 trillion in September 2025. The consistent rise in cash holdings underscores the challenges faced by policymakers in driving financial inclusion and encouraging the use of formal banking systems. Despite the proliferation of mobile banking, electronic transfers, and point-of-sale terminals, many Nigerians continue to favor cash transactions.

The breakdown of the data reveals that the increase in currency outside banks was particularly pronounced between September 2023 and September 2024, where it jumped by 66.2% to N4.016 trillion. The trend continued with a more modest increase of 11.2% to N4.465 trillion in September 2025, before reaching the current figure of N4.923 trillion. Analysts attribute this cash dependency to a combination of cultural preferences and systemic challenges that hinder broader financial inclusion.

“The latest figures indicate that despite advancements in digital payment solutions, the preference for cash transactions remains significant among Nigerians,” stated a financial analyst. “This trend poses a substantial challenge to the goals of deepening financial inclusion and transitioning to a cashless economy.”

As Nigeria moves towards greater integration of digital financial services, the rising currency outside banks calls for a strategic reevaluation of policies aimed at promoting electronic payments and enhancing public trust in the banking system. The need for effective communication and education about the benefits of digital transactions is more pressing than ever, as the country navigates its path towards a more inclusive financial landscape.