At N4.88trn, currency in circulation hits all-time high as scarcity persist
With the persistent scarcity of naira, Currency in circulation increased to N4.88 trillion as of November 2024, making it an all-time, according to a data by Central Bank of Nigeria (CBN).
The ‘money and credit statistics’ of the CBN revealed that Currency in circulation has gained 7.2 per cent Month-on-Month (MoM) and 45.72 per cent Year-on-Year growth when compared to N3.35 trillion reported November 2023.
The statistics breakdown of currency in circulation showed that January 2024 began with the currency in circulation at N3.65 trillion.
This stable figure indicated a moderate start to the year, aligning with typical post-holiday economic activities. By the end of February 2024, the currency in circulation slightly increased to N3.69 trillion, a growth of N43 billion or 1.18 per cent from January.
March 2024 saw a more pronounced increase, with the currency in circulation rising to N3.87 trillion, a month-on-month increase of N175 billion or 4.76 per cent.
The upward trend continued in April, with the currency in circulation reaching N3.92 trillion. The N53 billion or 1.39 per cent increase from March 2024 suggests sustained economic activity and increased consumer spending during the Easter period.
May 2024 experienced a further increase to N3.97 trillion, up by N42 billion or 1.07 per cent from April 2024, while the most notable rise occurred in June 2024, with the currency in circulation peaking at N4.04 trillion, an increase of N84 billion or 2.11 per cent from May 2024.
It crossed the N4 trillion mark in June 2024, and stood at N4.04 trillion.
In July 2024, it was at N4.05 trillion; August 2024, N4.14 trillion; September, N4.3 trillion and October 2024 at N4.55 trillion.
Analysts expressed that the current pattern in currency in circulation is a reflection of growing lack of confidence in the banking system, stressing that an increased preference for cash transactions, possibly driven by economic uncertainty or other socio-economic factors.
When Mr. Olayemi Cardoso resumed office as CBN governor in September 2023, currency in circulation was at N2.76 trillion.
While there has been a significant surge in the currency in circulation, the country’s economic growth has been tepid, with Nigeria’s economic growth rate for 2024 projected to be around 2.9per cent and 3.1per cent, having one of the slowest growth rates in West Africa.
The scarcity of the Naira in Nigeria is a multifaceted issue involving policy decisions, inflation, a struggling economy, and a shift towards digital payments that has not been fully embraced by the population.
While some of the policies, such as the currency redesign, are aimed at improving the economy in the long term, they have led to short-term challenges. Addressing the Naira shortage will require systemic changes, better banking infrastructure, and policies that balance the need for cashless transactions with the realities of Nigeria’s diverse population.
