Latest data from the Central Bank of Nigeria (CBN) on Wednesday showed that currency-in-circulation, or outside of bank vaults across the country soared by N239.71bn, or 10.88% to N2.441tr at the end of December 2019, when compared to the N2.329tr reported in the corresponding period of 2018.
The December 31, 2019 level, according to information available on the apex bank’s website, was the highest for the 12-month period, as well as since December 2014.
Compared month-on-month, the latest figures was higher than the N2.201tr reported as of November 2019, by N111.95bn or 4.81%.
The month-on-month rise in December was however lower than the N145.999bn leap between the end of and October and November.
Before the year-end number, the 12-month peak was the N2.241tr reported at the end of February last year. Many linked this to the huge politically linked spending ahead of the fiercely contested 2019 presidential election that was mainly between incumbent President Muhammadu Buhari of the All Progressives Congress, who emerged winner, and former Vice President Atiku Abubakar, his major challenger of the Peoples Democratic Party.
Also, many have noted that the currency-in-circulation remains on the high side, despite the Wednesday, September 18, 2019 implementation of punitive measures for deposits and withdrawal of amounts above a stated threshold by banks on the orders of the CBN in six states hosting major commercial cities across the country, as well as Abuja, the Federal Capital.
Recall that a circular by Sam Okojere, CBN’s Director, Payments System Management Department, titled “Re: Implementation of the cashless policy,” listed the states as Lagos, Ogun, Kano, Abia, Anambra, and Rivers States, as well as the Federal Capital Territory (FCT), Abuja.
The move which is part of efforts to migrate more people onto electronic payment platforms is expected to drastically reduce the cost of currency management in the country, with withdrawals of over N500,000 for individual accounts attracting 3% processing fees; and 2% for lodgments of similar amounts with effect from.
According to a circular to all deposit money bank (DMBs), which also announced the commencement of the charges on deposits in addition to already existing charges on withdrawals, corporate accounts will, however, attract 5% processing fees for withdrawals and 3% for lodgments of amounts above N3,000,000 from that date.
Nationwide implementation of the cashless policy, the circular noted, will take effect from March 31, 2020.