By Zainab Ojumola
Nigerians are holding onto cash at an unprecedented rate, with a staggering 94 percent of the country’s currency outside the banking system.
This trend was revealed by the Central Bank of Nigeria’s (CBN) in its latest 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.
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