Nigeria’s currency im circulation as at August 2019 moved up to N2.02 trillion. This is according to data from the Central Bank of Nigeria (CBN).
The apex bank data showed N2.24 trillion in February was the highest currency in circulation this year, while the figure reported in July (2 trillion) was the lowest currency in circulation.
Moses Ojo, the head of research, PanAfrican Capital Plc, attributed the hike in currency in circulation to the 2019 general elections, stressing that the CBN’s cashless policy of 2002 had worked in movement of physical currency.
Ojo said, “The main reason why currency in circulation increased this year is due to the elections. Elections in Nigeria are based on cash settlement. The electorate will not want candidates to credit their accounts but want to collect cash before voting” he explained.
Ojo also said it was going to take some time before the apex bank mops up currency in circulation.
The CBN in 2002 introduced the cashless policy to eliminate the amount of physical cash (coins and notes) circulating in the economy, and to encourage more electronic-based transactions (payments for goods, services, transfers, among others.)
According to Ojo, the cashless policy of the CBN has worked as indicated in volumes and values of Unstructured Supplementary Service Data and online transactions.
“The formal transactions via electronic have increased but the concern is the informal transactions that have not yet aligned with the CBN’s cashless policy, as there are a lot of informal activities that cannot be documented when it comes to movement of currency,” he explained.
Further breakdown of the currency in circulation data showed N2.01tn was the total currency in circulation in June from N2.11tn and N2.16tn in May and April, respectively.
For March, the apex bank data on its official website revealed N 2.15tn and N2.14tn in January.
CBN data revealed that currency in circulation in 2019 has remained at an average N2tn as against N1tn the previous year. For 2018, N2.34tn in December was the highest currency in circulation.