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Cash outside banks hits N4.3tn, CBN warns on scarcity
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Nigeria continues to face cash scarcity despite a significant year-on-year increase of N1.59 trillion in the amount of currency held outside banks.
Data from the Central Bank of Nigeria’s money and credit statistics shows that a substantial proportion of currency in circulation remains outside the banking system, with more than 90 per cent consistently held outside formal financial institutions in 2024.
The data revealed that currency outside banks surged to N4.29tn in October 2024, accounting for 94.3 per cent of the total currency in circulation of N4.55tn.
This represents a significant year-on-year growth of 59 per cent or N1.59tn from N2.70tn in October 2023, when 89.6 per cent of the total currency was outside banks.
On a month-on-month basis, the amount held outside banks increased by 6.8 per cent or N270bn, compared to the N4.02tn recorded in September 2024.
In September 2024, currency outside banks stood at N4.02tn, representing 93.1 per cent of the total currency in circulation of N4.31tn.
This marked a year-on-year increase of 66.3 per cent compared to N2.42tn in September 2023, when 87.5 per cent of the total was outside banks. The month-on-month increase was 3.8 per cent.
In August 2024, currency outside banks rose to N3.87tn, which accounted for 93.3 per cent of the total currency in circulation of N4.14tn.
This represented a year-on-year increase of 73.9 per cent compared to N2.22tn in August 2023, when 83.6 per cent of the total currency was outside banks.
The trend continued in July 2024 with N3.67tn held outside banks, representing 90.5 per cent of the total currency in circulation of N4.05tn.
Despite efforts to promote cashless transactions, the data shows that Nigerians remain deeply reliant on cash, which could hinder the country’s push for modernised financial systems.
The President, Association of Senior Staff of Banks, Insurance, and Financial Institutions, Olusoji Oluwole, attributed the worsening cash shortage across the country to the CBN’s inability to meet the cash demands of commercial banks.’
CBN to fine banks
Meanwhile, the CBN on Friday announced a fine of N150m per branch on Deposit Money Banks found guilty of facilitating the illegal flow of mint naira notes to currency hawkers and unscrupulous agents.
Saturday PUNCH had reported the surge in the hawking of naira notes at exorbitant charges in different parts of the country, as Nigerians continue to struggle with limited access to cash in banking halls despite threats by the CBN.
The apex bank disclosed this in a circular issued on Friday, December 13, 2024 and signed by the acting Director of the Currency Operations Department, Mohammed Olayemi.
The circular revealed that the CBN was concerned about the increasing prevalence of mint naira notes being traded by hawkers, a practice the bank described as impeding efficient and effective cash distribution to customers and the general public.
The circular, which referred to an earlier directive dated November 13, 2024, highlighted the apex bank’s determination to address the commodification of the naira.
Under the directive, any branch of a financial institution found culpable will face a penalty of N150m for the first violation.
Subsequent infractions, the CBN warned, would attract stricter sanctions under the provisions of the Banks and Other Financial Institutions Act 2020.
To ensure compliance, the apex bank stated that it would increase periodic spot checks in banking halls and ATMs while deploying mystery shoppers to uncover illicit cash hawking spots across the country.
The circular read, “CBN will continue to intensify the periodic spot checks to the banking halls/ATMs to review cash payouts to banks’ customers, as well as mystery shopping to all identified cash hawking spots across the country.
“In this regard, erring deposit money banks or financial institutions that are culpable of facilitating, aiding, or abetting, by direct actions or inactions, the illicit flow of mint banknotes to currency hawkers and unscrupulous economic agents that commodify naira banknotes shall be penalised at first instance N150,000,000.00 (one hundred and fifty million naira) only, per erring branch, and at later instances, apply the full weight of relevant provisions of BOFIA 2020.”
News
ALERT! Terrorists planning attacks on worship centres, schools, NYSC camps – Police issue alert
The Nigerian Police Force High Command has placed formations nationwide on red alert over alleged planned terror attacks on worship centres, schools, National Youth Service Corps, NYSC, orientation camps and other public places across the country.
According to Premium Times, the police also revealed that intelligence had shown the movement of armed elements from Katsina through Kaduna towards Plateau State.
The development followed fresh intelligence indicating increased mobilisation of terrorist elements for possible coordinated attacks on places of worship, learning institutions, NYSC orientation camps and other vulnerable targets across the country.
The findings showed that following the intelligence report, the high command has issued an operational order to its formations nationwide on the need to put the criminal elements in check before they will strike.
News
Gov. Soludo reveals Obi, Obiano accumulated debts still hanging on Anambra
The Anambra State Government has said it is still servicing loans inherited from the administrations of former governors Peter Obi and Willie Obiano, even as it maintains that Governor Chukwuma Soludo has not borrowed from any commercial bank since assuming office.
The Commissioner for Finance, Izuchukwu Okafor, said the state’s debt burden had fallen by more than 83 per cent under Soludo, with the administration also clearing several inherited domestic obligations.
Okafor disclosed this during a Ndi Anambra podcast uploaded by Anambra State New Media on Monday while explaining the state’s finances and debt position.
He said repayments on loans secured by previous administrations continued to be deducted from Anambra’s allocation through the Federation Account Allocation Committee, including obligations dating back to the Obi and Obiano administrations.
“Yes, every month during our FAC meetings, and when you see the schedule of FAC, you will notice there were substantial, significant deductions from our own FAC because of loans previously borrowed by previous administrations,” Okafor said.
“These loans were borrowed, you know, during the time of, even, not the immediate predecessor, even during the time of Peter Obi and Willie Obiano, His Excellency, the past governors,” he said.
According to the commissioner, the Soludo administration had focused on managing the inherited obligations while avoiding new commercial borrowing.
“It’s on record, you know, that this administration has not borrowed a kobo from any commercial bank since the inception of this administration,” he said.
Okafor said the government had also settled a number of legacy liabilities, including unpaid contracts, gratuity and pension arrears, bringing the state’s domestic debt close to zero.
“But I will give you an example for our domestic debt, the control, the legacy, what we call legacy debts, you know, the contracts that were not paid, not owing, the gratuity arrears, pension arrears, we’ve been able to clear all that,” he said.
He added, “In terms of, so, our domestic debt as of today is near-zero balance.”
The commissioner attributed the reduction in the overall debt burden to repayments made by the administration, saying several inherited loans had already been settled.
“But I will also say that Mr Governor has not borrowed a penny. We have been able to manage the debt, the state debt, very well, that we have brought it down by more than 83 per cent as of today. I’ve been able to repay back most of these loans,” he said.
External obligations, however, remain part of the state’s financial commitments. Okafor explained that repayments on some foreign-denominated loans are deducted from the state’s federal allocation under the terms attached to the facilities.
“But following as well, external debts, which is foreign loan-denominated debts, when you look at it, because there are some covenants around the period it will take to pay off these loans, particularly deducted as such when we are doing FAC,” he said.
“Before they limit Anambra’s own allocation, they will deduct it as such, because most of them, World Bank loans and other loans, they committed.”
Okafor also disclosed that the state had recently fully repaid one of its debts.
“There is one debt that we recently paid off, CAGS,” he said.
He said the reduction in inherited liabilities had given the government more room to finance other priorities.
“So, in a nutshell, I’ve been able to, you know, create more fiscal space for Anambra State,” Okafor said.
He added, “This administration has been able to create more by paying off, you know, backlog of numerous debts inherited from previous governments, starting from the time of Peter Obi.”
News
Sad: Nine passengers killed as gunmen open fire on bus in Plateau
No fewer than nine passengers were killed when gunmen opened fire on a commercial bus at Dungus Junction in Kuru community, Jos South Local Government Area of Plateau State.
Residents told journalists that the incident occurred when the bus driver parked to allow some passengers alight at the junction.
According to Daily Trust the bus which was heading to Jos was stained with blood and riddled with bullets.
Lawan Suleiman, a neighbor and teacher of one of the victims, confirmed the incident, adding that the attack occurred while the bus was stopped at the junction.
He said, “The driver is Ibrahim and he was my student. Three of them are from our community here in Bukuru. Their bodies have been deposited at the hospital. But relatives are preparing to collect them for burial.”
Spokesman of the Berom Youth Moulders, BYM, Rwang Tengwong, also confirmed the incident saying the victims were passengers travelling to Jos when the attackers opened fire on their vehicle.
“The incident happened around 9.40p.m. The victims were all passengers travelling to Jos when the terrorists opened fire on the vehicle. Among those killed was a member of Operation Rainbow. It is a very sad development and we lament the loss of lives.”
According to him, some of the passengers sustained gunshot wounds and were rushed to hospitals, where some later died.
Plateau state police command is yet to issue a statement regarding the incident as of press. (Daily Trust)
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