Christmas Countdown: Demand for Physical Cash Hits New Highs Across Nigeria
- Cash demand is rising across Nigeria ahead of the Yuletide season as many citizens fear ATM downtimes and unreliable electronic payments
- Large volumes of currency remain outside the banking system, worsening withdrawal difficulties and pushing people toward PoS operators
- The CBN has tightened oversight, issuing fines and conducting spot checks to ensure banks maintain adequate cash supply during the festive period
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology, Banking and the Economy.
With the festive season fast approaching, many Nigerians are intensifying preparations for Christmas shopping, travel, and family celebrations.
But as activities pick up, so has the rush for physical cash, fuelled by lingering concerns over electronic payment disruptions during peak holiday spending.
Source: UGC
Although the total amount of currency in circulation remains substantial, reports from major cities indicate that numerous Nigerians are finding it difficult to withdraw cash, heightening fears of possible Automated Teller Machine (ATM) shortages.
The anxiety reflects memories of previous festive seasons when network failures and ATM downtimes left many stranded.
Rising demand for cash as Yuletide approaches
Recent figures illustrate the persistence of cash outside the formal banking system. By March 2025, an estimated N4.6 trillion, about 91.9% of all currency issued, was circulating outside banks.
Six months later, in September 2025, about N4.47 trillion (roughly 90.2 per cent of available currency) remained outside the banking system.
This steady trend points to a strong cultural and structural dependence on physical cash, especially within informal markets, daily-wage sectors, and communities where digital payments are either unreliable or distrusted.
Banks have repeatedly assured the public of their readiness to meet holiday-season cash needs. Yet, the reality for many customers tells a different story.
Over the weekend, mild queues resurfaced at several ATMs in Lagos and other major cities, reinforcing public anxiety that the familiar year-end cash squeeze may be unfolding once again.
Concerns over PoS charges and cash availability
With ATMs being unpredictable in some neighbourhoods, a significant number of residents have turned to Point-of-Sale (PoS) agents as an alternative.
However, this shift has come with its own challenges. Many PoS operators have reportedly raised their charges, a move that has strained household budgets already burdened by rising food prices and transport costs ahead of the festive rush.
For PoS operators themselves, securing enough cash to meet customer demand has become a race against time.
Afeez Obalola, who operates a PoS outlet on Victoria Island, was seen hurrying between an ATM and the bank’s counter.
“I’m rushing because the machines working now may stop at any moment. December is always unpredictable, and once the rush starts, cash can become scarce.”
Economists warn that heavy cash hoarding outside banks weakens deposit mobilisation, undermines lending capacity, and restricts the banking sector’s contribution to broader economic growth.
Responding to recurring complaints, the Central Bank of Nigeria (CBN) has continued tightening oversight.
In January 2025, the apex bank fined nine deposit money banks a total of N1.35 billion for failing to maintain adequate ATM cash during the previous festive period.
Source: UGC
The CBN stressed that disruptions in cash supply erode public confidence and destabilise the financial system.
The bank has since maintained that random inspections of bank branches, ATMs, PoS operators, and other cash distribution points will continue throughout the festive season to ensure uninterrupted access to cash.
Naira kicks off December on a strong note
Meanwhile, Legit.ng earlier reported that the naira opened the month of December with a solid rebound against the US dollar, reversing the slight weakness recorded in the previous days.
According to market analysts, the currency’s renewed strength is being supported by improved foreign-exchange reserves and strategic interventions from the CBN.
Economic experts say the naira may continue to firm up through the end of the year, driven by rising investor confidence and sustained policy measures aimed at stabilising the foreign-exchange market.
Source: Legit.ng
