Despite Digital Drive, Cash Outside Banks Remains Over ₦5trn – CBN
Nigerians held ₦5.19 trillion outside the banking system as of May 2026, underscoring the dominance of cash transactions despite years of investment in digital payments and financial inclusion, according to Central Bank of Nigeria (CBN) data.
Currency outside banks rose from ₦5.08 trillion in April to ₦5.19 trillion in May, a monthly increase of ₦109.34bn (2.15%). Year-on-year, it was up ₦559.16bn (12.07%) compared with May 2025.
Total currency in circulation also grew to ₦5.69 trillion in May, with cash outside banks accounting for 91.27% of the total, meaning more than nine out of every ten naira circulated outside formal banking channels.
While cash use remains strong, bank reserves with the CBN fell by ₦841bn in May, dropping from ₦34.6tn to ₦33.8tn, suggesting lower liquidity buffers even as cash circulated more widely.
Compared with May 2025, however, reserves were still higher, rising by ₦2.9tn (9.39%) year-on-year.
The figures highlight Nigeria’s slow transition toward a digital economy. Despite rapid growth in instant payments, mobile banking, fintech services, and agent networks, cash continues to dominate retail trade, transport, informal commerce, and rural activities.
CBN Governor Olayemi Cardoso, at the launch of the Payment System Vision 2028, said the goal is to reduce cash outside banks to below 40% of total circulation.
Plans include deploying over 10 million QR-code and tap-to-pay points nationwide.
Analysts say the persistence of cash reflects trust issues, infrastructure gaps, and the informal economy’s reliance on physical money, even as regulators push for a more inclusive, technology-driven financial ecosystem.