The amount of physical cash held outside Nigeria’s banking system fell by N485.80 billion in the first six months of 2026, reaching its lowest level in seven months, fresh data from the Central Bank of Nigeria (CBN) has shown.
According to the latest Money and Credit Statistics released by the apex bank and analysed by Nairametrics, currency outside banks dropped from N5.41 trillion in December 2025 to N4.92 trillion in June 2026.
The decline represents an 8.98 per cent reduction over the six months, with the June figure marking the lowest level since November 2025, when cash outside banks stood at N4.91 trillion.
The fall also accelerated in June, as currency outside banks plunged by N270.97 billion, or 5.22 per cent, month-on-month—the steepest monthly decline recorded in the available data.
The latest figures suggest that more physical cash is moving back into commercial banks, even as Nigeria continues to expand digital payment channels and reduce its dependence on cash-based transactions.
However, the broader currency-in-circulation figure recorded a more modest decline, falling from N5.73 trillion in December 2025 to N5.52 trillion in June, a reduction of N209.56 billion or 3.66 per cent.
The disparity indicates that a greater proportion of the cash in circulation is being returned to the banking system rather than leaving circulation altogether.
The trend was not entirely consistent during the period. Cash outside banks declined from N5.41 trillion in December to N5.25 trillion in January and N5.19 trillion in February. Although March data were unavailable in the CBN dataset, the figure fell further to N5.08 trillion in April.
The downward movement was briefly reversed in May, when cash outside banks increased by N109.34 billion, or 2.15 per cent, to N5.19 trillion. The rebound, however, was short-lived, with the figure falling sharply in June.
Despite the decline, cash remains dominant in Nigeria’s economy.
In June, 89.11 per cent of all currency in circulation was held outside banks, down from 91.27 per cent in May and 89.74 per cent in June 2025.
This means that for every N100 in circulation, approximately N89.11 was held outside the banking system.
The figure, however, represents a notable shift from December 2025, when 94.33 per cent of currency in circulation was outside banks. By June 2026, the proportion had fallen by more than five percentage points, while the share of cash held within banks nearly doubled from 5.67 per cent to 10.89 per cent.
The development points to a gradual, though still limited, shift towards formal cash intermediation in the economy.
Nigeria’s retail trade, transportation, informal businesses and rural economic activities remain heavily dependent on physical cash, despite the rapid expansion of instant payments, mobile banking, fintech platforms and agent banking.
The CBN, under Governor Olayemi Cardoso, has continued to push for a more digital and inclusive payment ecosystem.
At the recent launch of the Nigeria Payment System Vision 2028 in Abuja, Cardoso said the initiative would build on the country’s progress in digital payments and accelerate the transition to a technology-driven financial system.
The apex bank has set an ambitious target of reducing cash circulating outside the banking system to below 40 per cent of total currency in circulation.
The June data, therefore, signals progress towards that objective, but with nearly nine out of every 10 naira still outside banks, the figures also underscore the scale of the challenge facing Nigeria’s cash-to-digital transition.
