Cash still rules in Nigeria, moving through markets, shops, transport, and households rather than banks.
In November, people held ₦4.91 trillion outside banks, over 93% of total circulation.
Cash Dominates Daily Life
This habit shows that Nigerians actively choose cash, not merely react to temporary policy changes.
At the start of the year, people kept ₦4.74 trillion outside banks, around 90.5% of all cash.
In February, they maintained 89.6%, and in March, they increased holdings to 91.9%, showing a clear pattern.
By May, more than 92% of naira bills circulated outside banks.
August and September followed the same trend.
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For nearly two years, people have moved more than nine out of every ten naira bills outside banks.
Rising Bank Reserves
Meanwhile, the Central Bank of Nigeria actively increased reserves, raising them to ₦30.94 trillion in November 2025, nearly ₦5 trillion higher than the previous year.
At the peak in September, reserves reached ₦34.67 trillion, reflecting strong central bank liquidity management.
Informal Economy Absorbs Cash
Despite rising reserves, banks captured only 6–10% of total cash, showing weak deposit mobilisation.
Most new cash entered the informal economy, moving through retail trade, transport, households, and small businesses.
As a result, banks hold reserves but struggle to expand lending, while people continue relying on cash for everyday transactions.
Ultimately, Nigeria’s cash economy remains dominant, with most money circulating actively outside banks, supporting trade and daily life.
