The Central Bank of Nigeria (CBN), on Thursday reported a 9.78 per cent growth in currency revolving around the nation’s economy, as currency-in-circulation stood at N1.571 trillion at the end of November, 2013.

According to the CBN data published on its website, the figure represented an increase of N140.07 billion over the N1.43 trillion reported in the corresponding period of 2012.

Between October and November (month-on-month), 2013, currency in circulation rose by N21.498 billion, or 1.38 per cent; while year-to-date, the figure dropped from N1.631 trillion reported at the height of the 2012 yuletide season by N60.683 billion or 3.71 per cent.

Currency circulating within the country has remained above N1 trillion, since hitting the trillion Naira mark in December 2008, when it stood at N1.2 trillion.

In the past 12 months, the report noted, currency in circulation attained a height of N1.631 trillion in December 31, 2012, a significant N200.755 billion or 14.02 per cent rise over the level in November. This increase may not be divorced from the yuletide celebrations when there is a lot of withdrawals and spending during and after the festivities.

The quantum of currency in circulation, analysts believe, is an indication that more needs to be done in terms of orientating people on the need to move to other means of paying for goods and services.

Almost two years after the takeoff of the pilot phase for the cashless policy initiated by the Bankers Committee comprising the CBN and banks, expectations were that the quantum of cash in the system should be reducing drastically and not rising.

CBN Governor, Lamido Sanusi once admitted that the Nigerian economy is heavily cash-oriented in transactions of goods and services (especially retail transactions), which is not in line with the global trend, considering Nigeria’s ambition to be amongst the top 20 economies by the year 2020.

According to him, “the major focus of payments system reform is to increase the diversity and liquidity of payments instruments.  Thus, enhanced efficiency of the payments systems has been achieved in many modern economies, driven by the user’s changing needs, competition among service providers and changes in technology. Consequently, reform of payment system has been a critical element of major CBN reforms. The cashless system driven by the CBN does not mean the absence or replacement of cash. However it is the provision of safer and more efficient alternatives of payments to bank customers”.

Source: Daily Independent (by Kingsley Ighomwenghian)