According to figures obtained from the Central Bank of Nigeria, the currency in circulation rose by N418bn from N2.91tn in December, 2020, to N3.33tn in December, 2021. The data showed that currency in circulation had increased by 19.06 percent from N2.44tn recorded as of December, 2019.
Currency in circulation as currency outside the vaults of the central bank, that is, all legal tender currency in the hands of the general public and in the vaults of the Deposit Money Banks.
The CBN, in its report on currency operations stated that, “the growth in CIC reflected the continued dominance of cash in the economy.”
“Analysis of the CIC shows that a greater proportion was in higher denomination banknotes (N100, N200, N500 and N1000). The higher denomination banknotes together accounted for 63.47 per cent and 98.08 per cent of the total CIC, in terms of volume and value, respectively.
“The volume of lower denomination banknotes (N5, N10, N20, N50) accounted for 28.43 per cent of the total CIC and 1.92 per cent, in terms of value as at end-December 2020”, it added.
According to the CBN, electronic payment options were introduced with a major aim of reducing the amount of naira notes used for transactions, but not to eliminate cash usage.
Cashless transactions using the e-payments, the CBN said, would help to increase convenience, provide more service options, reduce risk of cash-related crimes, and provide cheaper access to (out-of-branch) banking services and access to credit.
The CBN said it employed the “accounting/statistical/withdrawals & deposits approach” to compute the currency in circulation in Nigeria.
It said this approach involved tracking the movements of currency in circulation on a transaction-by-transaction basis.