The Central Bank of Nigeria (CBN) reported a staggering 305.7% surge in currency management costs in 2024, as the aftermath of Nigeria’s naira redesign policy triggered widespread cash shortages and forced emergency interventions.
According to the apex bank’s audited financial statements, currency issuance expenses rose to ₦315.18 billion at the Bank level (up from ₦77.67 billion in 2023), while the Group level saw an unprecedented spike from ₦1.11 billion to ₦238.65 billion.
The steep increase reflects the costs of mass printing, distribution, and destruction of currency notes, necessitated by acute cash shortages throughout 2024 following the controversial naira redesign. The move, initially intended to promote financial inclusion and combat cash-related crime, led to nationwide scarcity, long queues, and economic disruptions.
Heavy Sanctions for Banks, Currency Hoarding Crackdown
To address persistent supply issues, the CBN sanctioned multiple Deposit Money Banks (DMBs), including GTBank, Fidelity Bank, and Access Bank, which together paid nearly ₦193 million in fines. In early 2025, nine more banks were fined ₦150 million each for non-compliance during the high-demand yuletide season.
The CBN’s aggressive enforcement measures included mystery shopper audits and direct oversight of cash distribution in urban and rural branches.
Cash Still Dominates Despite Push for Digital Adoption
Despite efforts to push digital payments, physical cash remains dominant, especially in Nigeria’s informal economy. As of December 2024:
Currency outside banks jumped 49.3% to ₦5.13 trillion
Total currency in circulation rose to ₦5.44 trillion
94.2% of that was held outside banks
CBN Returns to Surplus But Faces Ballooning Liquidity Costs
Despite the cost pressures, the CBN posted a surplus for 2024, reversing a prior-year deficit, attributing the performance to:
- Stronger portfolio inflows
- Improved remittance receipts
- Recovery from intervention fund repayments
- Boost in external reserves from $36.6bn to $38.8bn
However, liquidity management expenses tripled to ₦4.5 trillion, and losses from settled FX derivatives spiked to ₦13.9 trillion, reflecting the strain of clearing backlogged forex obligations and sustaining naira stability.
