The Central Bank of Nigeria (CBN) reported a sharp rise in currency management costs in 2024, with expenses increasing by over 300% amid the prolonged cash shortages that rattled the economy during the year.
According to the apex bank’s latest audited financial statement, currency issue expenses at the Bank level rose to N315.18 billion in 2024, representing a 305.7% increase compared to N77.67 billion in 2023.
Similarly, at the Group level, costs jumped dramatically to N238.65 billion from just N1.11 billion in the previous year, an unprecedented spike that highlights the scale of intervention efforts.
Currency issue expenses cover the printing, processing, distribution, and disposal of currency notes.
The CBN explained that the surge reflects the operational demands of managing cash supply across the country, especially during periods of acute shortages.
The surge comes against the backdrop of a major cash crisis that swept across Nigeria during early 2024, largely linked to disruptions following the naira redesign policy initiated in late 2022.
While the policy aimed to drive financial inclusion and reduce cash-related crimes, it inadvertently triggered significant cash shortages, forcing the CBN to ramp up currency production and logistics operations to stabilise the financial system.
The apex bank’s currency operations involved not just the mass printing of new notes but also the retrieval and destruction of old notes, a process that attracted high operational costs due to nationwide distribution challenges.
Despite several emergency measures deployed by the CBN, including mandatory ATM loading directives and public cash scarcity hotlines, queues at ATMs and cash access difficulties persisted well into early and late 2024.
The apex bank also ramped up enforcement efforts against Deposit Money Banks (DMBs), sanctioning non-compliant institutions and strengthening cash distribution oversight across urban and rural areas.
According to the CBN, the sanctions were part of a zero-tolerance policy for lapses that disrupted public access to cash during peak demand periods.
Data from the CBN’s Money and Credit Statistics showed that currency outside banks surged by 49.3% to N5.13 trillion as of December 2024, up from N3.43 trillion a year earlier.
Similarly, the total currency in circulation rose to N5.44 trillion in December 2024, reflecting a 49.0% year-on-year increase. Currency outside banks accounted for 94.2% of total cash in circulation, indicating that despite the CBN’s push for digital adoption, physical cash remained dominant, especially within the informal sector and rural areas.
The over 300% rise in currency expenses exposed the high cost of Nigeria’s currency management framework and abrupt monetary policy shifts.
Despite these challenges, the CBN said its 2024 financial results reflected deliberate reforms to strengthen governance, transparency, and operational discipline, with the aim of supporting Nigeria’s broader economic recovery.