The Central Bank of Nigeria (CBN) has revealed a staggering 305.7% increase in currency management expenses in 2024, with costs at the Bank level surging to N315.18 billion, up from N77.67 billion in 2023.
The sharp rise, disclosed in the apex bank’s latest audited financial statement, reflects the immense operational strain of managing cash supply during the nationwide cash shortage that rocked the economy throughout the year.
At the Group level, expenses similarly skyrocketed to N238.65 billion from just N1.11 billion the previous year—an unprecedented escalation that highlights the scale of intervention following the turbulent naira redesign policy.
The CBN explained that currency issue expenses—covering the printing, processing, distribution, and disposal of banknotes—escalated due to the logistics and infrastructure required to stabilise the cash supply system amid the crisis.
The cash crunch, which began in early 2024, was primarily triggered by the naira redesign initiative launched in late 2022, which aimed to promote financial inclusion and curb illicit cash holdings. However, poor implementation and distribution lapses plunged the country into months-long cash shortages.
The CBN was forced to ramp up currency production and retrieval efforts, including the mass destruction of old notes, all of which incurred significant operational costs.
To alleviate public frustration, the CBN issued emergency measures including mandatory ATM loading directives and opened cash scarcity hotlines. Yet, queues and shortages persisted well into late 2024.
In response, the apex bank intensified regulatory scrutiny, sanctioning several Deposit Money Banks (DMBs) for failures in cash distribution.
Guaranty Trust Bank paid N160.4 million in fines—the highest—following infractions discovered during a CBN Mystery Shopping Exercise.
Fidelity Bank and Access Bank were fined N27.28 million and N5 million, respectively.
In early 2025, the CBN imposed further fines of N150 million each on nine commercial banks, including Fidelity, First Bank, Keystone Bank, Zenith Bank, and others, for failing to comply with festive period cash availability mandates.
These actions, the CBN said, were part of a zero-tolerance approach to prevent disruption in public access to cash during high-demand periods.
According to the CBN’s Money and Credit Statistics:
Currency outside banks rose by 49.3% to N5.13 trillion as of December 2024.
Total currency in circulation increased by 49.0% to N5.44 trillion.
A notable 94.2% of this cash remained outside the banking system, underscoring the ongoing dominance of physical cash in the informal sector and rural communities—despite digital payment advocacy.
Despite the high cost of currency management, the CBN reported a financial surplus in 2024, reversing a deficit from the previous year. This improvement was attributed to:
Stronger portfolio inflows and diaspora remittances
Improved external reserve management (rising from $36.6bn in 2023 to $38.8bn in 2024)
Recoveries from past intervention programmes
However, other financial pressures persisted:
Liquidity management expenses tripled to N4.5 trillion in 2024 (from N1.5 trillion in 2023), due to intensified Open Market Operations (OMO) aimed at combating inflation.
Losses from settled derivative contracts climbed to N13.9 trillion, driven by efforts to clear legacy foreign exchange obligations.
The CBN stated that the results reflect ongoing reforms aimed at strengthening governance, enhancing transparency, and restoring operational discipline to support national economic recovery.