The Central Bank of Nigeria (CBN) has reported a staggering increase in its currency management expenses, spending over N315 billion in 2024 alone more than 300% jump compared to the previous year. This spike comes on the heels of the cash shortages that gripped the nation throughout the year, following the naira redesign policy.
According to the CBN’s newly released financial statements, currency issuance costs at the bank reached N315.18 billion in 2024, a sharp rise from N77.67 billion recorded in 2023. At the broader group level, expenses surged even more dramatically, climbing from just N1.11 billion to N238.65 billion — an unprecedented leap that underscores the scale of the central bank’s response to the crisis.
These expenses cover the cost of printing, distributing, processing, and retiring old naira notes. The CBN attributed the rise to the extraordinary logistical and operational efforts needed to stabilize cash flow during severe shortages that emerged early in 2024. The naira redesign, intended to modernize the currency system and curb financial crimes, inadvertently triggered a widespread cash crunch, prompting the apex bank to ramp up currency production and retrieval operations.
Efforts to mitigate the crisis included mass printing of new notes and an extensive retrieval process for old currency, both of which carried hefty operational costs, especially given the distribution challenges across Nigeria’s vast urban and rural areas.
Meanwhile, commercial banks also came under intense scrutiny. The CBN penalized several banks for failing to comply with cash availability requirements during the height of the shortages. Guaranty Trust Bank faced the largest fine, paying N160.4 million after irregularities were uncovered during a regulatory inspection. Fidelity Bank and Access Bank were fined N27.28 million and N5 million respectively.
In a further crackdown in early 2025, the central bank fined nine banks — including First Bank, Zenith Bank, and UBA — a total of N1.35 billion for failing to ensure adequate cash supplies during the festive season.
Despite these efforts and the push for increased digital transactions, Nigeria remains a cash-driven economy. CBN data reveals that cash held outside banks surged by 49.3% to N5.13 trillion by December 2024, while total currency in circulation climbed to N5.44 trillion. This means physical cash continues to dominate, accounting for over 94% of all currency in circulation, particularly in rural and informal sectors.
As Nigeria grapples with balancing financial reforms and cash dependency, the costs of managing its currency system are proving to be an increasingly heavy burden.
