Nigerians are holding onto cash at an unprecedented rate with a staggering 94 percent of the currency outside the banking system.

This Central Bank of Nigeria (CBN) stated this in its March 2024 Money and Statistics data.

The figures paints a concerning picture of declining trust in the banking system and potential risks to the nation’s economic growth.

According to the data on the CBN website, the amount of physical money M1 in circulation has skyrocketed compared to the previous year.

In January 2024, it stood at N3.65 trillion, more than double the N1.39 trillion recorded in January 2023.

This trend continued throughout the quarter, with March 2024 reaching N3.87 trillion, a 130 percent increase from the previous year.

This significant rise suggests the CBN has pumped more cash into the system, likely in response to the scarcity issues plaguing 2023.

While the CBN injects more cash, the amount held outside banks is growing even faster.

January 2024 saw N3.28 trillion outside the banking system compared to N792.18 billion just a year prior.

By March 2024, this figure had ballooned to a concerning N3.63 trillion, a 150 percent increase year-on-year.

This indicates Nigerians are hoarding cash at a rate exceeding the CBN’s efforts to increase circulation.

This behavior can be traced back to the severe cash scarcity crisis experienced in 2023.

The CBN’s flawed implementation of a naira redesign policy, intended to promote a cashless economy and combat crime, resulted in widespread disruption and a loss of trust in banks.

Fear surrounding the validity of old notes and difficulty accessing cash fueled a hoarding mentality that continues to this day.

The CBN has previously acknowledged the issue, citing “high volume withdrawals” from banks and “panic withdrawals” by customers.

It also warned banks and merchants against hoarding cash. However, despite these efforts and the suspension of fees on large cash deposits, Nigerians remain hesitant to return their money to the banking system.

dre11:




https://thenationonlineng.net/nigerians-hoarding-94-percent-cash-says-cbn-report/

Nlfpmod

RockHard:
Ever since that disastrous Emefiele naira confiscation policy, a lot of people stopped trusting banks to keep their money safe.

GanagiBitrus:

Nowadays I mostly do cashless transactions & so is the case with most Nigerians. So where is this report coming from?

Jagabanbattle:


When last did you deposit cash in bank? Unless you are business owner, no one enter bank to deposit again. Instead, most deposit money through POS while POS agent gives to those withdrawing Cash.

I think this accusation is about taking POS operators off market. Until then, we can only observe.

LordIsaac:
Back to this again😊

dre11:



https://thenationonlineng.net/nigerians-hoarding-94-percent-cash-says-cbn-report/

DatNiggaDaz:


You are still blaming Emiefele

Who else would you blame PO , Ipob , Obidients,, Igbos , SE , Biafra ,

I don't expect you to blame anyone else.

Afterall it is favouring you & your family

SalamRushdie:
Ofcourse since the banks have refused to okay their role most of the cash are now in the hands of POS agents

Jagabanbattle:


When last did you deposit cash in bank? Unless you are business owner, no one enter bank to deposit again. Instead, most deposit money through POS while POS agent gives to those withdrawing Cash.

I think this accusation is about taking POS operators off market. Until then, we can only observe.

maasoap:


You read the report at all? The distrust people now have was caused by Emefiele, that's what this report pointed out. Sorry if it hurts you

CrossRhodes:

Is it not still your APC government?
Or is it LP you want to blame?
Emefiele was a card carrying member of the demonic party, so it's the same pack of wolves

maasoap:


You read the report at all? The distrust people now have was caused by Emefiele, that's what this report pointed out. Sorry if it hurts you

maasoap:


Why is mentioning of Emefiele now hurting you? I guess it has to do with association by tribe/region