The Central Bank of Nigeria (CBN) has announced that the currency in circulation has reached an unprecedented N4.8 trillion as of December 2024, marking a significant increase from N4.3 trillion recorded just three months prior. This surge represents a 4.7% growth and underscores a broader trend of increasing liquidity within the Nigerian economy.
Despite this record high in currency circulation, Nigeria continues to grapple with severe inflationary pressures, which have reached alarming levels. The National Bureau of Statistics recently reported that the inflation rate surged to 34.6% in November 2024, driven by escalating food prices and ongoing structural inefficiencies within the economy. This inflation rate is indicative of a persistent economic challenge, as rising costs of living continue to strain households across the nation.
The increase in currency circulation is primarily attributed to the CBN's efforts to enhance liquidity in response to ongoing cash scarcity issues faced by Nigerians. However, this liquidity has not translated into improved access to cash for consumers. Reports indicate that many banks are rationing withdrawals, leading to frustrations among customers who are unable to access their funds as needed.
A senior official from the CBN emphasized that while the growth in currency circulation is intended to facilitate economic transactions, it must be accompanied by effective cash management practices at financial institutions. The CBN has implemented stringent measures to ensure compliance among banks and has warned of significant penalties for those found guilty of exacerbating cash scarcity through mismanagement.