Cash held outside Nigeria’s banking system increased to N5.19 trillion in May 2026, highlighting the continued reliance on cash transactions despite ongoing efforts by the Central Bank of Nigeria (CBN) to promote digital payments and financial inclusion.
Recent money and credit data released by the CBN showed that currency outside banks rose by N109.34 billion, representing a 2.15 per cent increase from N5.08 trillion recorded in April.
Compared to the same period last year, the figure grew by N559.16 billion, or 12.07 per cent, from N4.63 trillion in May 2025.
The report also indicated that total currency in circulation climbed slightly from N5.65 trillion in April to N5.69 trillion in May, reflecting an increase of N43.59 billion. On a year-on-year basis, currency in circulation expanded by 13.46 per cent from N5.01 trillion recorded in May 2025.
As a result, cash held outside banks accounted for 91.27 per cent of all currency in circulation in May. This was higher than the 90.03 per cent recorded in April but lower than the 92.40 per cent recorded a year earlier.
The figures suggest that although electronic payment channels continue to grow, cash remains the dominant means of transaction for many Nigerians.
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The data further showed that bank reserves fell by N840.77 billion on a monthly basis, declining from N34.60 trillion in April to N33.76 trillion in May. However, compared with May 2025, reserves increased by N2.90 trillion, indicating stronger liquidity levels within the banking sector over the past year.
Cash outside banks stood at N5.41 trillion in December 2025 before dropping to N5.25 trillion in January and N5.19 trillion in February 2026. It later declined to N5.08 trillion in April before rising again in May.
Analysts note that large volumes of cash kept outside the formal banking system can weaken the effectiveness of monetary policy and reduce the capacity of banks to support lending and economic activity.
The development comes as the CBN intensifies efforts to bring more Nigerians into the formal financial system. Under its Nigeria Payments System Vision 2028, the apex bank aims to onboard 50 million additional Nigerians and reduce cash outside the banking system to less than 40 per cent of money in circulation by 2028.
CBN Governor, Olayemi Cardoso, has said the target is aimed at strengthening digital payments, boosting banking sector liquidity, improving financial inclusion, and enhancing the effectiveness of monetary policy across the country.
