Cash held outside Nigeria’s banking system rose to *N4.87 trillion in August 2026*, reversing three months of steady decline and raising fresh concerns over the adoption of digital payments in the country.
According to the latest money and credit data from the Central Bank of Nigeria (CBN), currency outside banks increased by *N70.9 billion or 1.48%* from N4.80 trillion recorded in July 2026. The July figure was an eight-month low.
*Breakdown of Cash Outside Banks Trend*
The August increase ends a sharp drop recorded between May and July:
– *May 2026:* N5.19 trillion
– *June 2026:* N4.92 trillion
– *July 2026:* N4.80 trillion (8-month low)
– *August 2026:* N4.87 trillion
This represents a cumulative reduction of about N391.8 billion before the rebound.
Despite the August rise, cash outside banks is still *N381.3 billion lower* than the N5.25 trillion recorded in January 2026. However, on a year-on-year basis, it is up by about *N419 billion or 9.4%* compared to August 2025.
*Why Cash Outside Banks is Rising Again*
Financial analyst, Tunde Ayileka, said the increase should not be seen as a failure of Nigeria’s cashless policy.
He explained that monthly movements are influenced by seasonal cash demand, increased economic activities, household withdrawals, and the dominance of cash in Nigeria’s large informal economy.
*Money Supply Also Expands*
CBN data shows the rise in physical cash happened alongside growth in overall liquidity. Broad money supply (M3) increased to *N139.38 trillion in August 2026*, up from N138.78 trillion in July and up 16.4% from N119.69 trillion in August 2025.
This indicates that the increase in cash outside banks is part of broader money supply expansion, not an isolated development.
*What It Means:*
The data shows that despite CBN’s push for electronic payments, cash remains king for millions of Nigerians, especially in rural areas and informal markets where POS and bank transfers are still limited.
