NIGERIA · CENTRAL BANK DATA
Key Facts
- —The country Nigeria is Africa’s most populous country, with Abuja as its capital and Lagos as its commercial hub, and the naira is its currency.
- —What happened The Central Bank of Nigeria’s data, reported on Thursday 22 October, show cash outside banks at N4.92 trillion (about US$3.69 billion) in September.
- —What it means Cash outside banks is the notes and coins that households, firms and traders hold instead of keeping them in bank accounts.
- —The trend The figure rose 1% from August and is about 10.3% above September 2025, but it sits about 9% below December 2025.
- —The target The central bank wants cash outside banks below 40% of currency in circulation by 2028, against about 89% in June.
- —Rate basis Conversions use 1,334 naira per US dollar, the rate on 22 October 2026.
- —Still open The central bank has not said why the figure rose in September, and the month’s total currency in circulation was not reported.
Cash outside banks in Nigeria reached N4.92 trillion (about US$3.69 billion) in September, up N48.7 billion (about US$36.5 million), the central bank’s data show. The term means physical money that households, firms and traders hold instead of banking it.
The June share of cash outside banks, the latest published, was 89.11%, and the same month’s money supply data show the wider picture. For US readers, this explainer matters because the central bank says shrinking this cash pile would improve its control of inflation.
What Cash Outside Banks Means
Cash outside banks, which the central bank calls currency outside banks, is the notes and coins held by households, firms and informal traders. Banks keep the rest of the cash in circulation in their own vaults and tills.
Currency in circulation is all the physical cash the central bank has issued and that is in use. It is the cash outside banks plus the cash that banks hold.
Nigeria Cash Outside Banks: The Numbers
The figure rose 1% in September to N4.92 trillion (about US$3.69 billion) from N4.87 trillion (about US$3.65 billion) in August, the central bank’s data show. It is up about 10.3% from N4.47 trillion (about US$3.35 billion) in September 2025, Nairametrics reported.
It peaked at N5.41 trillion (about US$4.05 billion) in December 2025, so September sits about 9% below that high. After N5.19 trillion (about US$3.89 billion) in May, it fell to N4.80 trillion (about US$3.60 billion) in July before turning up.
How Big Is the Cash Share?
In April, N5.08 trillion (about US$3.81 billion) of the N5.65 trillion (about US$4.23 billion) in circulation sat outside banks, about 90%, the Gazette reported. Nairametrics put the share at 89.11% in June, down from 94.33% in December 2025.
Total currency in circulation fell from N5.73 trillion (about US$4.29 billion) in December to N5.52 trillion (about US$4.14 billion) in June. That is a smaller drop than for cash outside banks, which Nairametrics read as more cash returning to bank accounts.
Why the Central Bank Wants Less of It
The central bank unveiled its Payment System Vision 2028 in Abuja, as reported on 1 June, aiming to bring the cash share below 40%. Governor Olayemi Cardoso said it builds on progress in digital payments, and the bank says a lower share would help control inflation.
The plan also targets 95% of adults with a bank account or wallet by 2028, up from about 74% in 2023, the Gazette reported. It expects more than 10 million QR-code and tap-to-pay points in markets, transport hubs and rural areas.
Why Nigerians Keep Cash: What Analysts Say
Proshare, a Nigerian research firm, cited weak trust after the 2023 cash shortage, patchy connectivity, power cuts and few bank branches, Weetracker reported in January. Weetracker added that small traders face fees and a taxable paper trail on digital payments.
Professor Mufutau Ijaiya told Daily Trust in June that some politicians may be taking money out of banks to hold ahead of the election. He also linked part of the cash to insecurity, saying money collected by kidnappers does not go to banks.
Why It Matters for Inflation and Lending
Proshare argued that when most currency sits outside banks, the central bank’s main tools, such as adjusting interest rates, lose their potency. The central bank cut its benchmark rate to 23% from 26.5% in September, and inflation eased to 14.63%, according to the latest figures.
Banks lend out deposits, and cash kept in pockets, shops and homes is not a deposit. Private-sector credit, the money banks lend to businesses and households, slipped 0.6% to N83.93 trillion (about US$62.9 billion) in September.
What It Means for US Readers
For investors in naira assets, the cash share is one gauge of how far the central bank’s rate decisions can travel through the banking system. For US payment and fintech firms, about nine in ten naira in circulation sat outside banks as of June.
Reaching the 40% target would mean a long shift, and the central bank gives itself until 2028. Nairametrics noted that the one-month rise does not by itself show Nigerians turning away from digital payments.
What Is Not Known
The central bank has not said why the figure rose in September, and the month’s total currency in circulation was not in the reports. The latest cash share is therefore open, and the last published figure is 89.11% for June.
No source cited here measures how much cash is held for politics, insecurity or informal trade. Nor does any split the monthly swings into seasonal demand, household withdrawals and business activity.
More: Nigeria news in English, every day from The Rio Times.
Frequently Asked Questions
What does cash outside banks mean?
It is the physical money that households, companies and traders hold instead of keeping it in bank accounts. The central bank also calls it currency outside banks.
How much cash is outside Nigerian banks?
The central bank’s data show N4.92 trillion (about US$3.69 billion) in September 2026. That is up N48.7 billion (about US$36.5 million) from August.
Why does the central bank want to reduce it?
It says a lower cash share would build confidence in digital payments and improve monetary policy, especially inflation control. Its Payment System Vision 2028 targets a share below 40% of currency in circulation.
Does the September rise mean Nigerians use digital payments less?
Nairametrics said the rise does not by itself establish that. The figures measure cash held outside banks, not the number or value of electronic payments.
Does cash outside banks reduce bank lending?
Banks lend out deposits, and cash held outside banks is not a deposit. The central bank has not published a link between the cash level and lending.
Sources: Nairametrics, Cash outside banks rises in September, 22 October 2026; Central Bank of Nigeria, Money and Credit Statistics, 22 October 2026; Nairametrics, Cash outside banks hits seven-month low, 28 July 2026; Nairametrics, Nigerians hold cash outside banks despite digital push, 23 June 2026; The Gazette, CBN targets reduction of cash outside banks to 40%, 1 June 2026; Daily Trust, Cash outside banks despite cashless policy, 24 June 2026; Weetracker, Nigeria’s unstoppable digital payments boom meets immovable object: cash, 28 January 2026.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief