The amount of physical currency circulating in Nigeria's economy jumped 81 percent to N5.44 trillion in August 2026, compared with N3.01 trillion in August 2023, according to the Central Bank of Nigeria's Money and Credit Statistics. The rise underscores persistent demand for cash even as electronic payment systems have expanded rapidly over the period.
The growth in physical currency has slowed markedly over the three-year span. The sharpest increase occurred between August 2023 and August 2024, when currency in circulation rose by N1.54 trillion, a gain of 51.1 percent to reach N4.55 trillion. By August 2025, the pace had moderated to 11.2 percent, with currency in circulation climbing to N5.057 trillion, an increase of N508 billion. In the year to August 2026, the growth rate eased further to 7.5 percent, adding N379 billion to reach N5.436 trillion.
Banks' reserves have also expanded substantially over the same period, the CBN data showed. From August 2023 to August 2026, banks' reserves increased by N17.539 trillion, representing growth of 94.7 percent. Reserves climbed from N18.528 trillion in August 2023 to N25.456 trillion in August 2024, then to N31.583 trillion in August 2025, before reaching N36.067 trillion by August 2026. The CBN classifies both currency in circulation and banks' reserves as components of reserve money or base money.
David Adonri, Managing Director of High Cap Securities Limited, noted that increased physical cash holdings reduce the liquidity available to commercial banks for lending and other financial services. However, he cautioned against interpreting rising currency stocks as evidence of excessive liquidity or inflation risk. Higher nominal prices, larger transaction values and economic expansion can all drive increased cash demand, he said. The continued growth in physical currency is particularly striking given Nigeria's rapid expansion in electronic payments, mobile banking, fintech services and instant-payment platforms over the past three years, suggesting that the country's cash economy remains robust despite the digital revolution.
For savers, borrowers and investors in Nigeria, the moderation in currency growth alongside stable electronic payment expansion suggests the monetary system is gradually becoming more sophisticated, though cash remains essential to economic activity.