The Central Bank of Nigeria has reported that cash held outside the country's banking system increased by N70.9 billion in August 2026. This represents a 1.48% rise to N4.87 trillion, up from N4.80 trillion recorded in July. The increase comes after three consecutive months of decline, with cash holdings outside banks falling from N5.19 trillion in May to N4.92 trillion in June and further to N4.80 trillion in July.
Despite the August rebound, the amount of cash outside the banking system remained below the level recorded at the beginning of the year. In January, currency outside banks stood at N5.25 trillion, meaning the August figure was still N381.3 billion lower. The CBN data also showed that currency outside banks has increased on a year-on-year basis, with the August 2026 figure being about N419 billion, or 9.4%, higher than the N4.45 trillion recorded in August 2025.
The longer-term trend indicates that cash holdings outside banks increased significantly towards the end of 2025 and early 2026. Currency outside banks stood at N4.47 trillion in September 2025 before rising above N5 trillion in January 2026. This trend suggests that cash remains an important part of economic activity in Nigeria, despite efforts to promote digital payments and deepen financial inclusion.
The Central Bank of Nigeria is targeting a reduction in cash circulating outside the banking system to below 40% of total currency in circulation by 2028. The CBN is also targeting financial inclusion of 95% of the adult population within the same period. To achieve this, the apex bank launched the Nigeria Payment System Vision (PSV) 2028 in Abuja, which aims to build on the country's progress in digital payments while accelerating the development of a more inclusive and technology-driven financial system.
Nigeria has experienced significant growth in electronic payments in recent years, driven by fintech companies, mobile money operators, instant payment systems, and digital banking platforms. However, the latest increase in currency outside banks suggests that cash remains a dominant form of payment. The CBN Governor, Olayemi Cardoso, has emphasized the need to reduce reliance on physical cash and promote digital payments.
The broad money supply in Nigeria rose to N139.38 trillion in August 2026, representing a 16.4% increase from N119.69 trillion recorded in August 2025. Broad money includes currency in circulation, demand deposits, savings and time deposits, as well as foreign currency deposits and other monetary components. Net domestic assets also increased to N101.99 trillion in August from N101.07 trillion in July, representing a monthly increase of about N925.5 billion.
The August rise in cash outside banks will be closely watched in coming months as the CBN continues its efforts to expand digital payments and reduce the economy's reliance on physical cash. The CBN's strategy aims to promote a more inclusive and technology-driven financial system, and the outcome of these efforts will be crucial in determining the future of cash holdings outside banks in Nigeria.
Key points
- Cash outside banks in Nigeria rose by 1.48% to N4.87 trillion in August 2026.
- The Central Bank of Nigeria is targeting a reduction in cash circulating outside the banking system to below 40% of total currency in circulation by 2028.
- Nigeria's broad money supply rose to N139.38 trillion in August 2026, representing a 16.4% increase from August 2025.
