The Central Bank of Nigeria (CBN) reported a sharp rise in currency management costs in 2024, with expenses increasing by over 300% amid the prolonged cash shortages that rattled the economy during the year.
According to the apex bank’s latest audited financial statement, currency issue expenses at the Bank level rose to N315.18 billion in 2024, representing a 305.7% increase compared to N77.67 billion in 2023.
Similarly, at the Group level, costs jumped dramatically to N238.65 billion from just N1.11 billion in the previous year, an unprecedented spike that highlights the scale of intervention efforts.
Currency issue expenses cover the printing, processing, distribution, and disposal of currency notes.
The CBN explained that the surge reflects the operational demands of managing cash supply across the country, especially during periods of acute shortages.
The surge comes against the backdrop of a major cash crisis that swept across Nigeria during early 2024, largely linked to disruptions following the naira redesign policy initiated in late 2022.
While the policy aimed to drive financial inclusion and reduce cash-related crimes, it inadvertently triggered significant cash shortages, forcing the CBN to ramp up currency production and logistics operations to stabilise the financial system.
The apex bank’s currency operations involved not just the mass printing of new notes but also the retrieval and destruction of old notes, a process that attracted high operational costs due to nationwide distribution challenges.
Banks sanctioned for cash management failures
Despite several emergency measures deployed by the CBN, including mandatory ATM loading directives and public cash scarcity hotlines, queues at ATMs and cash access difficulties persisted well into early and late 2024.
The apex bank also ramped up enforcement efforts against Deposit Money Banks (DMBs), sanctioning non-compliant institutions and strengthening cash distribution oversight across urban and rural areas.
- The pressure on banks to ensure cash availability intensified in 2024, leading to hefty penalties for several financial institutions. Three major banks—Guaranty Trust Bank, Fidelity Bank, and Access Bank—paid a combined N192.68 million in fines for various infractions linked to cash distribution failures.
- GTBank bore the largest penalty, paying N160.40 million following infractions uncovered during the CBN’s Mystery Shopping Exercise. Fidelity Bank was fined N27.28 million, while Access Bank paid N5 million over issues related to the handling of unfit or hoarded Naira notes.
- In early 2025, the CBN further fined nine commercial banks a combined N1.35 billion (N150 million each) for failing to comply with cash availability directives during the 2024 yuletide season. Affected banks included Fidelity Bank, First Bank, Keystone Bank, Union Bank, Globus Bank, Providus Bank, Zenith Bank, United Bank for Africa, and Sterling Bank.
According to the CBN, the sanctions were part of a zero-tolerance policy for lapses that disrupted public access to cash during peak demand periods.
What you should know
Data from the CBN’s Money and Credit Statistics showed that currency outside banks surged by 49.3% to N5.13 trillion as of December 2024, up from N3.43 trillion a year earlier.
Similarly, the total currency in circulation rose to N5.44 trillion in December 2024, reflecting a 49.0% year-on-year increase. Currency outside banks accounted for 94.2% of total cash in circulation, indicating that despite the CBN’s push for digital adoption, physical cash remained dominant, especially within the informal sector and rural areas.
The over 300% rise in currency expenses exposed the high cost of Nigeria’s currency management framework and abrupt monetary policy shifts.
- Despite the high costs associated with currency management, the CBN posted a surplus in its 2024 financial year, reversing a deficit recorded in 2023.
- The bank attributed the turnaround to tighter operational control, stronger portfolio inflows, improved diaspora remittances, better external reserve management, which rose from $36.6 billion in 2023 to $38.8 billion in 2024, and recoveries from past intervention programmes.
- However, liquidity management expenses jumped from N1.5 trillion in 2023 to N4.5 trillion in 2024, as the CBN intensified Open Market Operations (OMO) to curb inflationary pressures amid fiscal injections. Losses from settled derivative contracts also rose sharply to N13.9 trillion, reflecting efforts to clear inherited foreign exchange obligations.
Despite these challenges, the CBN said its 2024 financial results reflected deliberate reforms to strengthen governance, transparency, and operational discipline, with the aim of supporting Nigeria’s broader economic recovery.
