The Central Bank of Nigeria spent N315.18bn on currency issue expenses in 2024, marking a sharp increase of 306 per cent compared to N77.67bn recorded in 2023, the apex bank’s audited financial statement for the year has shown.

Currency issue expenses cover the printing, processing, distribution, and disposal of banknotes.

The latest figures reveal that the CBN’s cost of managing physical cash spiralled dramatically during the year under review, as Nigeria grappled with lingering cash shortages and disruptions in the money supply chain.

The surge in expenditure came as the country continued to deal with the effects of the naira redesign policy introduced in late 2022.

Despite efforts to stabilise cash circulation throughout 2023, Nigerians still faced queues at ATMs and difficulties in accessing cash in early and late 2024.

Faced with mounting public outcry, the CBN deployed several emergency measures to address the crisis.

Deposit Money Banks were directed to ensure consistent ATM loading and rural cash distribution, while the Bank also launched public hotlines for citizens to report cash scarcity incidents.

Also, the CBN ramped up enforcement efforts, including deploying monitoring teams, issuing sanctions against non-compliant banks, and mandating improved cash distribution.

The PUNCH further learnt that three Nigerian banks, Guaranty Trust Bank, Fidelity Bank, and Access Bank, paid a combined N192.68m in fines to the Central Bank of Nigeria in 2024 for various infractions linked to cash scarcity and currency management failures.

Details from the audited financial statements of the banks show that GTB bore the highest penalty, paying N160.40m for infractions uncovered during the CBN’s Mystery Shopping Exercise carried out in 2024.

The exercise, conducted discreetly across bank branches and ATMs, was aimed at assessing compliance with cash distribution mandates following widespread shortages that disrupted daily economic activities.

Fidelity Bank was fined N27.28m in 2024 for penalties relating to cash shortages identified by the CBN.

The apex bank had intensified monitoring efforts to ensure banks maintained sufficient cash availability, particularly in rural and underserved areas where cash dependency remained high.

Access Bank, meanwhile, was penalised N5m for contravening regulations linked to mystery shopping inspections involving the confiscation of unfit or hoarded naira notes.

The bank’s infraction underlined the CBN’s focus on ensuring proper handling of both new and old currencies during the recovery period from the 2023–2024 cash scarcity.

The combined N192.68m in penalties paid by the three banks affirmed the CBN’s zero-tolerance stance towards operational lapses that hindered public access to cash during the period.

In fact, regulatory scrutiny on currency management intensified as nine commercial banks were fined a combined N1.35bn for failing to comply with cash availability directives early in 2025.

According to a CBN statement, each of the banks was fined N150m following spot checks that revealed non-compliance with the apex bank’s cash distribution guidelines.

The affected banks include Fidelity Bank Plc, First Bank Plc, Keystone Bank Plc, Union Bank Plc, Globus Bank Plc, Providus Bank Plc, Zenith Bank Plc, United Bank for Africa Plc, and Sterling Bank Plc.

The fines will be directly debited from the banks’ accounts with the CBN.

The statement read, “In a clear message of zero tolerance for cash flow disruptions, the Central Bank of Nigeria has sanctioned Deposit Money Banks for failing to make Naira notes available through automated teller machines, during the yuletide season.

“Each bank was fined N150m for non-compliance, in line with the CBN’s cash distribution guidelines, following spot checks on their branches. The enforcement action follows repeated warnings from the CBN to financial institutions to guarantee seamless cash availability, particularly during periods of high demand.”

The PUNCH further observed that Currency outside the banking system surged by 49.3 per cent in 2024 as the Central Bank of Nigeria ramped up cash issuance to ease persistent liquidity shortages across the economy.

According to data obtained from the CBN’s Money and Credit Statistics, currency outside banks stood at N5.13tn as of December 2024, compared to N3.43tn recorded in December 2023.

This represents a year-on-year increase of N1.69tn as more physical cash returned into public hands amid efforts to stabilise the money supply system.

Similarly, the total currency in circulation, which captures all cash issued by the apex bank, whether held by banks or the public, rose to N5.44tn in December 2024, up from N3.65tn a year earlier.

The data indicate a 49.0 per cent year-on-year rise in circulating cash, reflecting the broader push by the CBN to rebuild liquidity following the severe cash scarcity that rocked the economy between late 2022 and early 2024.

The 2024 figures mark a sharp reversal from the 2023 tightening measures introduced alongside the controversial naira redesign programme, which had initially pushed down currency outside banks to historic lows before supply constraints triggered broader economic disruptions.

A closer analysis shows that currency outside banks accounted for 94.2 per cent of total currency in circulation as at December 2024.

In comparison, in December 2023, currency outside banks represented 94.0 per cent of the currency in circulation. The marginal increase suggests that despite intensified efforts by the CBN to promote digital transactions, cash remained dominant in the financial system, particularly at the household and informal sector levels.

The rise in cash outside banks coincided with heightened CBN interventions during the year.

Following widespread complaints of persistent cash shortages, the apex bank increased the volume of naira notes printed and distributed through Deposit Money Banks.

It also intensified monitoring activities, fined banks for cash distribution failures, and released additional guidelines to enhance ATM cash loading and branch-level cash accessibility.

The high proportion of cash outside the banking sector raises concerns about the effectiveness of financial deepening policies aimed at bringing more money into the formal sector.

The over 300 per cent rise in currency expenses is likely due to the massive printing of new notes, the logistics of redistributing cash across the country, and the destruction of old and damaged banknotes.