CBN Spends N315bn on Currency Amid Chaotic Cash Crisis

Samuel Mobolaji

Nigeria’s Central Bank spent a staggering N315.18 billion on currency management in 2024, a more than 300 per cent increase from the previous year, as it battled a nationwide cash crisis that upended economic activity and strained banking infrastructure.

The sharp rise in spending, disclosed in the apex bank’s latest audited financials, underscores the high cost of navigating one of the most disruptive currency shortages in the country’s history.

The spike in expenses—covering printing, processing, distribution, and disposal of currency—was triggered by a monetary policy overhaul that began with the naira redesign in late 2022.

While intended to foster financial inclusion and reduce illicit cash holdings, the policy plunged the country into protracted cash shortages in 2024, forcing the CBN to dramatically scale up logistics, ramp up note production, and retrieve and destroy old currency across the federation.

At the Group level, currency management costs soared to N238.65 billion from just N1.11 billion in 2023, highlighting the extraordinary scale of intervention. Despite emergency directives requiring banks to load ATMs and maintain public cash access hotlines, long queues persisted into late 2024.

The CBN responded with a series of sanctions, fining Guaranty Trust Bank, Fidelity Bank, and Access Bank a combined N192.68 million for infractions. In early 2025, nine more banks were fined N1.35 billion for failing to ensure cash availability during the festive season.

Data from the CBN showed that currency outside banks rose by 49.3 per cent to N5.13 trillion by December 2024, with total currency in circulation hitting N5.44 trillion. Physical cash accounted for over 94 per cent of total currency, signalling the continued dominance of cash transactions across Nigeria, particularly in rural and informal sectors—despite ongoing digital payment advocacy.

While the currency management cost ballooned, the CBN posted a financial surplus in 2024, reversing the deficit of the previous year. The turnaround was attributed to stronger portfolio inflows, increased remittances, and improved reserve management, which lifted external reserves from $36.6 billion in 2023 to $38.8 billion in 2024.

Still, liquidity management costs soared to N4.5 trillion, and derivative settlement losses jumped to N13.9 trillion, reflecting the heavy toll of efforts to clear legacy foreign exchange obligations and contain inflation.

The apex bank described the results as part of a broader reform agenda aimed at restoring discipline and transparency, even as the costs of past monetary missteps continue to weigh heavily on Nigeria’s economic recovery.