Central Bank of Nigeria (CBN) Currency Management Costs Soar Over 300% to N315.18bn in 2024 Amid Prolonged Cash Crisis

The Central Bank of Nigeria (CBN) saw money management costs of more than 300% in 2024, a deprived increase that reflects the expense after the NAIR's re -design policy and the prolonged cash shortages that hold the country.

According to the latest financial statement that Audit, Apex Bank spent N315.18 billion at the bank level at last year's money issue costs – from N77.67 billion in 2023, marking 305.7% increase. At the group level, the figure jumped to N238.65 billion from just N1.11 billion last year, which envelops the extraordinary size of the intervention required to stabilize Nigeria's cash supply system.

Balloon costs, which include printing, processing, distributing, and disposal of money notes, is one of the clearest indicators of chaos that followed the CBN botched attempt to release old Naira notes. The move, originally launched under former CBN governor Godwin Emefiele in late 2022, was intended to promote those without cash transactions, fight counterfeiting, and reduce cash -related crimes. Instead, it sparked a national crisis, drying cash from circulation, shutter of businesses, and forcing millions that line up a lot of time in ATMs and banking halls.

While CBN's new leadership under Yemi Cardoso has created several emergency interventions to correct the situation, including aggressive note printing and greater money distribution logistics, the financial toll has become bright now.

APEX Bank said the increase was due to monetary management management requests and extraction during chronic cash shortage.

But the situation has also revealed how expensive Nigeria's currency architecture is. With bad infrastructure, security challenges, and an informal relying on cash, efforts to replace old notes and re -attach new ones that are ballooned with a logistic nightmare. In many rural and semi-urban communities, cash is no longer time.

Banks punished with cash access failures

Despite the CBN's efforts to flood the system with cash, the currency crisis has stopped most of the year, leading to aggressive regulatory action against money banks (DMBs) accused of recovering notes or failing to meet ATM loading requirements.

Only in 2024, the Guaranty Trust Bank, Fidelity Bank, and Access Bank paid a joint N192.68 million in fine. GTBank faces most of the penalties, N160.40 million after a “mystery shopping” operation with no cover of many offenses. The Fidelity Bank is punished by N27.28 million, while the Access Bank has been given the N5 million fines for the naira's unworthy note.

Crackdown intensified in early 2025 when CBN punished nine commercial banks with a combined N1.35 billion, N150 million each, for failing to fulfill cash existence directives during the 2024 Yuletide season. Affected banks include the first bank, Zenith Bank, UBA, Sterling Bank, Union Bank, Fidelity Bank, Keystone Bank, Globus Bank, and Providus Bank.

Cash is still dominant despite pushing for digital

Even with CBN's aggressive drive towards financial integration and digital transactions, physical cash remains king in Nigeria. Data from bank money and credit statistics showed that money outside the banking system advanced 49.3% to N5.13 trillion in December 2024, compared to N3.43 trillion a year before. That figure costs 94.2% of the N5.44 trillion total cash in circulation – conducting ongoing physical cash dependence, especially in the informal economy.

The increase suggests that while the central bank wants a digital move, the implementation of the financial policy, especially through sudden and disturbing reforms, continues to deepen the distrust and hope of cash.

Excessive return, but hidden costs continue

Despite the heavy costs associated with cash management, the CBN posted an excess financially for the first time for two years, recovering from a deficiency recorded in 2023. Rotation, according to the bank, was driven by better control over operation, improved portfolio inflows, increased remittances of diaspora, and more and more reserves. Foreign reserves rose from $ 36.6 billion from 2023 to $ 38.8 billion in 2024.

However, the picture is not fully rosy. The costs of liquidity management were tripled to N4.5 trillion in 2024, from N1.5 trillion last year, while CBN intensified open operating operating (OMOs) to soak excess cash in the system and fight inflation that is being attacked by fiscal injections. The bank also recorded a terrifying N13.9 trillion on losses from fixed contracts of derivatives, mostly tied to foreign exchange obligations.

However, Apex Bank insists that 2024 is a year of intentional course correction.

Beyond the numbers, the 300% increase in currency release costs is a strong price description Nigeria pays for sudden and poorly conducted reforms. The policy of redesigning Naira-was requested to launch it as a masterstroke for preventing vote and corruption buying-has become a cautionary tale. Beginning as a brave idea quickly became a famine throughout the country, exposing the degradation of the country's financial infrastructure and the connectivity between policy ambitions and indigenous facts.