Nigeria’s currency outside of banks is a record N2.8 trillion as of October 2022, Nigerian central bank data reveals.
This goes against the latest decision by the central bank to replace the N200, N500 and N1000 notes due to the increasing flood of out-of-circulation currency.
However, data from the main bank shows that the upward trend started in 2015 and has doubled during President Buhari’s seven-year term.
Data is not linked: According to the data, the uncirculated coin was almost N1.1 trillion in June 2015, the first full month of the current president.
- At the end of his first term on May 29.th, In 2019, the currency in circulation rose to around N1.7 trillion as more Nigerians kept the naira out of banks.
- But between then and October 31st2022, the total amount of currency outside of Nigerian banks increased by N1 trillion to a whopping N2.8 trillion.
- A closer look at the graph below reveals the rise that began during the Covid lockdown year of 2020, where around N470 billion was additional currency outside of banks.
- The figure was 440 billion naira in 2021 and has been flat this year, bringing the total to around 910 billion naira in two years.
CBN confirmed this: The main bank also confirmed this at its press conference on October 17, where it announced the introduction of new naira notes.
- “Significant hoarding of notes by members of the public, with statistics showing that more 85 percent of currency in circulation are outside the vaults of commercial banks.
- To be more specific, as of the end of September 2022, the data available in the CBN indicates that N2.73 trillion of the N3.23 trillion currency in circulation, was outside the vaults of commercial banks across the country; and supposedly retained by the audience.
- Obviously, the currency in circulation it has more than doubled since 2015; going from N1.46 trillion in December 2015 to N3.23 trillion in September 2022. This is a worrying trend that cannot be allowed to continue.”
See the table;
Source: Nairalytics/CBN
Thought bubble: The central bank has cited corruption as one of the main reasons for the increase in uncirculated currency. However, they have provided no data to substantiate this claim.
- But a closer look indicates that the largest increase in uncirculated coin occurred between 2020 and 2021. coinciding with a period of massive central bank intervention funds that the IMF has advised the main bank to end.
- We are of the opinion that this may have triggered the rise in non-circulating currency, as more than N920 billion of the additional N1.65 trillion added to non-bank currency since June 2015 are from the years 2020 and 2021.
- We also see an increase in uncirculated currency in years of massive black market currency depreciation, such as 2015, 2017, 2020, and 2021.
Did some of the intervention funds end up as cash in the hands of Nigerians who have no incentive to return this to the banking sector?
…Does this data confirm that CBN is to blame for the rise of currency outside of banks? Read more at… Naijaonpoint.