CBN’s cashless dream under threat as cash outside banks hits N4.92trn

Sign in Welcome! Log into your account your username your password Forgot your password? Get help Password recovery Recover your password your email A password will be e-mailed to you. Tuesday, October 27, 2026 Sign in / Join News Lead Story Gist World News Faceoff Education Photo Gallery Healthy Living Economy Business Suite Naira Wise Value for Money Money || Capital Market Politics Hot Seat City Pulse Crime Court Metro Point Extra Photo Of The Week Opinion Views Cartoons Editorial Weekend Treat Beer Parlour Parliament Elder’s Porch Marriage Palaver Elegance Entertainment Fashion Jewel Spouses Star christian world Islam FROM THE ARCHIVES ThePoint TV Facebook News Lead Story Gist World News Faceoff Education Photo Gallery Healthy Living Economy Business Suite Naira Wise Value for Money Money || Capital Market Politics Hot Seat City Pulse Crime Court Metro Point Extra Photo Of The Week Opinion Views Back page Eye witnesses Cartoons Editorial Weekend Treat Beer Parlour Parliament Elder’s Porch Marriage Palaver Elegance Entertainment Fashion Jewel Spouses Star christian world Islam FROM THE ARCHIVES ThePoint TV Search Home News Lead Story CBN’s cashless dream under threat as cash outside banks hits N4.92trn NewsLead StoryTrending FacebookXPinterestWhatsApp Cash hoarding exposes weak monetary control, fuels informal economy — Experts ‘Situation may become worse ahead of 2027 elections’ Financial experts have raised concerns over the sustained rise in cash outside the banking system, which increased by N48.73 billion to N4.92 trillion in September 2026, warning that the development poses a threat to monetary stability, financial inclusion and effective economic planning.

According to data released by the Central Bank of Nigeria, cash outside banks rose from N4.87 trillion in August to N4.92 trillion in September, extending the increase for a second consecutive month after rising from N4.80 trillion in July.

Year-on-year, the figure increased by N458.22 billion, from N4.47 trillion in September 2025 to N4.92 trillion in September 2026. Although below the peak of N5.19 trillion in May 2026 and N5.41 trillion in December 2025, the renewed upward trend has alarmed analysts.

Experts say the data reveals the resilience of Nigeria’s informal economy, which accounts for over 50% of Gross Domestic Product, where cash remains the language of trust and settlement.

“For traders in major markets, artisans, transport operators and rural farmers, cash is instant, final, does not attract charges and does not require network connectivity,” a financial analyst noted.

They argued that the growth suggests economic activity is increasingly being settled outside the formal banking channel, resulting in tax leakages and challenges for GDP measurement and planning.

The experts also linked the surge to lingering behavioural effects of the 2023 cash scarcity triggered by the currency redesign policy, which created deep distrust and prompted Nigerians to resort to cash hoarding as a safeguard.

With inflationary pressures and rising living costs, many households and small businesses, especially in areas with weak digital infrastructure, prefer to hold cash for daily transactions, they added.

The CBN data further showed that total currency in circulation increased to N5.52 trillion in September from N5.44 trillion in August, with cash outside banks accounting for 89.23% of it, leaving only N594.33 billion inside banks.

The analysts warned that the development weakens the CBN’s monetary policy transmission, reduces banks’ deposits available for lending, and undermines the apex bank’s cashless drive.

This is evident as broad money supply rose to N146.6 trillion in September, while credit to the private sector declined by N537.61 billion to N83.93 trillion, as credit to government rose by N6.36 trillion to N39.4 trillion.

At the launch of the Nigeria Payment System Vision 2028, CBN Governor Olayemi Cardoso had set a target to reduce cash outside banks to below 40% of total currency in circulation and raise financial inclusion to 95% of the adult population by 2028, from the current 79%.

Experts said while the increase in cash outside banks does not necessarily mean Nigerians are abandoning electronic payments, achieving the CBN target will require making digital channels more reliable, affordable and accessible to restore public confidence.

For other keen observers, the situation may become worse ahead of the 2027 elections as politicians are reportedly saving up cash to prosecute the polls.

A political analyst, John Olusegun told THE POINT that many political party candidates and their supporters have been stockpiling raw cash for the next year elections.

“There are indications that the situation of the cash flow outside banks would worsen because politicians would still save up more cash. You know we still battle with vote-buying and despite the campaign and warning, many political parties and their candidates will still dole out cash for voters,” he posited.

The CBN data showed that currency outside banks increased from N4.87 trillion in August.

The latest increase followed a rise in August, when cash outside banks climbed from N4.8 trillion in July to N4.87 trillion.

Further analysis showed that cash outside banks increased by N458.22 billion, from N4.47 trillion in September 2025 to N4.92 trillion in September 2026.

The figure fell from N5.19 trillion in May 2026 to N4.92 trillion in June 2026 and N4.80 trillion in July 2026 before rising to N4.87 trillion in August 2026 and N4.92 trillion in September the same year.

The CBN data also showed that total currency in circulation increased to N5.52 trillion in September from N5.44 trillion in August.

Currency outside banks accounted for 89.23 percent of total currency in circulation in September, compared with 89.67 percent in August.

Broad money supply rose by N7.51 trillion to N146.6 trillion in September from N139.09 trillion in August.

Demand deposits increased by N888.35 billion to N39.12 trillion — up from N38.24 trillion during the same period.

Credit to the government rose by N6.36 trillion to N39.4 trillion, while credit to the private sector declined by N537.61 billion to N83.93 trillion.

ThePoint Ng is your news, entertainment, music fashion website. We provide you with the latest breaking news and videos straight from the entertainment industry.