The Central Bank of Nigeria (CBN) saw its currency management expenses spike by more than 300% in 2024, a staggering rise that reflects the costly aftermath of the naira redesign policy and the prolonged cash shortages that gripped the country.
According to its latest audited financial statement, the apex bank spent N315.18 billion at the Bank level on currency issue expenses last year—up from N77.67 billion in 2023, marking a 305.7% increase. At the Group level, the figure jumped to N238.65 billion from just N1.11 billion the year prior, underlining the extraordinary scale of intervention required to stabilize Nigeria’s cash supply system.
The ballooning cost, which includes printing, processing, distributing, and disposing of currency notes, is one of the clearest indicators of the turbulence that followed the CBN’s botched attempt to phase out old naira notes. The move, originally launched under former CBN Governor Godwin Emefiele in late 2022, was intended to promote cashless transactions, combat counterfeiting, and reduce cash-related crimes. Instead, it sparked a national crisis, drying up cash from circulation, shuttering businesses, and forcing millions to queue for hours at ATMs and banking halls.
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While the new CBN leadership under Yemi Cardoso made several emergency interventions to correct the situation, including aggressive note printing and wider currency distribution logistics, the financial toll has now become evident.
The apex bank said the increase was due to the operational demands of managing currency distribution and retrieval during the acute cash shortage.
But the situation also revealed just how expensive Nigeria’s currency management architecture has become. With poor infrastructure, security challenges, and a cash-dependent informal economy, efforts to replace old notes and re-circulate new ones ballooned into a logistical nightmare. In many rural and semi-urban communities, cash simply never returned on time.
Banks Fined Over Cash Access Failures
Despite the efforts of the CBN to flood the system with cash, the currency crisis lingered for much of the year, leading to aggressive regulatory action against Deposit Money Banks (DMBs) accused of hoarding notes or failing to meet ATM loading requirements.
In 2024 alone, Guaranty Trust Bank, Fidelity Bank, and Access Bank paid a combined N192.68 million in fines. GTBank faced the bulk of the penalties, N160.40 million after a “mystery shopping” operation uncovered multiple infractions. Fidelity Bank was fined N27.28 million, while Access Bank was handed an N5 million fine for hoarding and poor handling of unfit naira notes.
The crackdown intensified in early 2025 when the CBN sanctioned nine commercial banks with a combined fine of N1.35 billion, N150 million each, for failing to comply with cash availability directives during the 2024 yuletide season. The affected banks included First Bank, Zenith Bank, UBA, Sterling Bank, Union Bank, Fidelity Bank, Keystone Bank, Globus Bank, and Providus Bank.
Cash Still Dominates Despite Push for Digital
Even with the CBN’s aggressive drive toward financial inclusion and digital transactions, physical cash remains king in Nigeria. Data from the bank’s Money and Credit Statistics showed that currency outside the banking system surged by 49.3% to N5.13 trillion by December 2024, compared to N3.43 trillion a year earlier. That figure accounts for 94.2% of the N5.44 trillion total cash in circulation—underscoring the continued reliance on physical cash, particularly in the informal economy.
The rise suggests that while the central bank wants a digital transition, its execution of monetary policy, especially through sudden and disruptive reforms, continues to deepen public distrust and dependency on cash.
Surplus Returns, But Hidden Costs Persist
Despite the heavy costs associated with managing cash, the CBN posted a financial surplus for the first time in two years, recovering from a deficit recorded in 2023. The turnaround, according to the bank, was driven by better operational control, improved portfolio inflows, increased diaspora remittances, and more strategic reserve management. Foreign reserves rose from $36.6 billion in 2023 to $38.8 billion in 2024.
However, the picture was not entirely rosy. Liquidity management expenses tripled to N4.5 trillion in 2024, up from N1.5 trillion the previous year, as the CBN resorted to intensified Open Market Operations (OMO) to soak up excess cash in the system and fight inflation triggered by fiscal injections. The bank also recorded a staggering N13.9 trillion in losses from settled derivatives contracts, mostly tied to legacy foreign exchange obligations.
However, the apex bank insists that 2024 was a year of deliberate course correction.
Beyond the numbers, the 300% rise in currency issuance costs is a powerful illustration of the price Nigeria pays for abrupt and poorly executed reforms. The naira redesign policy—hailed at its launch as a masterstroke for curbing vote-buying and corruption—has become a cautionary tale. What started as a bold idea quickly turned into a nationwide cash famine, exposing the fragility of the country’s monetary infrastructure and the disconnect between policy ambition and grassroots realities.