The Central Bank of Nigeria (CBN) recorded an extraordinary increase in currency management costs in 2024, with spending skyrocketing by more than 300% as the country grappled with widespread cash shortages that disrupted the economy.
According to the bank’s newly released audited financial statements, currency issuance expenses at the Bank level surged to ₦315.18 billion in 2024, marking a massive 305.7% jump from ₦77.67 billion in 2023. At the Group level, costs exploded to ₦238.65 billion, a staggering rise from just ₦1.11 billion the previous year. This unprecedented leap underscores the scale of the CBN’s intervention during the cash supply crisis.
These expenses covered the full scope of currency operations, including printing, processing, distribution, and the destruction of old notes. The CBN stated that the sharp rise in expenditure directly resulted from the logistical and operational demands of maintaining a stable cash supply across the nation during periods of intense scarcity.
The surge occurred in the aftermath of the naira redesign policy launched in late 2022. While the policy aimed to boost financial inclusion and curb cash-related crimes, it inadvertently triggered a severe cash shortage that lasted well into 2024. As a result, the CBN had to ramp up currency production and intensify nationwide distribution efforts to stabilize the financial system.
The apex bank not only accelerated the printing of new notes but also undertook large-scale retrieval and destruction of old currency. This dual effort placed significant pressure on resources, further driving up operational costs due to the complexity of distributing cash to both urban and rural regions.
CBN Cracks Down on Non-Compliant Banks
In response to the persistent cash shortages, the CBN deployed several emergency strategies. These included mandating banks to load ATMs consistently and setting up public hotlines for reporting cash scarcity. Nevertheless, ATM queues and cash access problems persisted across the country throughout 2024.
To enforce compliance, the CBN intensified its regulatory oversight of Deposit Money Banks (DMBs), penalizing those that failed to meet cash availability directives. This crackdown saw three major banks—Guaranty Trust Bank, Fidelity Bank, and Access Bank—collectively pay ₦192.68 million in fines for various infractions.
GTBank faced the steepest penalty, paying ₦160.40 million after the CBN’s Mystery Shopping Exercise revealed violations. Fidelity Bank incurred a ₦27.28 million fine, while Access Bank paid ₦5 million for mishandling unfit or hoarded naira notes.
Additionally, in early 2025, the CBN imposed fresh fines on nine commercial banks, totaling ₦1.35 billion—₦150 million per bank—for failing to comply with cash supply orders during the 2024 festive season. The penalized banks included Fidelity Bank, First Bank, Keystone Bank, Union Bank, Globus Bank, Providus Bank, Zenith Bank, United Bank for Africa, and Sterling Bank. The CBN stressed that these sanctions reflected its zero-tolerance stance on lapses that hindered public access to cash during periods of high demand.
Cash in Circulation Soars Despite Digital Push
Despite the central bank’s efforts to promote cashless transactions, physical cash continued to dominate Nigeria’s monetary landscape. Data from the CBN’s Money and Credit Statistics revealed that currency outside the banking system rose by 49.3% to ₦5.13 trillion as of December 2024, up from ₦3.43 trillion in December 2023.
Likewise, total currency in circulation climbed to ₦5.44 trillion, showing a 49% year-on-year increase. Notably, currency outside banks made up 94.2% of the total, highlighting the enduring reliance on cash, particularly in rural and informal sectors. This trend undercut efforts to drive digital adoption and emphasized the cost burden of maintaining a cash-heavy economy.
CBN Reports Profit Despite Soaring Costs
Although the central bank incurred heavy currency-related expenses, it ended 2024 with a financial surplus, reversing the deficit posted in 2023. The CBN credited the turnaround to stronger internal controls, improved foreign portfolio inflows, higher diaspora remittances, better management of external reserves—which increased from $36.6 billion in 2023 to $38.8 billion in 2024—and recoveries from earlier intervention programs.
However, the bank’s overall operating environment remained challenging. Liquidity management expenses surged from ₦1.5 trillion in 2023 to ₦4.5 trillion in 2024, as the CBN intensified its Open Market Operations (OMO) to absorb excess liquidity and combat inflation driven by fiscal injections. In addition, losses from settled derivative contracts climbed sharply to ₦13.9 trillion, reflecting efforts to clear outstanding foreign exchange obligations inherited from previous administrations.
Policy Reforms and Economic Recovery Efforts Underway
Despite these fiscal pressures, the CBN emphasized that its 2024 financial performance reflected deliberate reforms aimed at strengthening transparency, governance, and operational efficiency. These efforts, the bank noted, were vital to supporting Nigeria’s broader economic recovery and restoring confidence in monetary policy.
Looking ahead, the CBN pledged to maintain its commitment to stabilizing the naira, improving cash management frameworks, and reinforcing its oversight of financial institutions. With physical cash still dominating Nigeria’s economy and currency management costs rising sharply, the apex bank faces the continued challenge of balancing monetary reforms with operational sustainability.
