Nigeria’s central bank has issued a strong warning: the country must carefully balance the shift toward digital payments with continued support for cash usage to avoid leaving rural communities, informal traders, and small businesses behind.
This message was delivered by the Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, at the 2026 Committee of Heads of Bank Operations (CHBO) Conference held in Lagos. Cardoso, who was represented by his Special Adviser on Operational Risk Management, Mr. Fatai Karim, spoke at the event themed “Reimagining the Future of Cash in a Digital-First Economy.”
Cash Remains Essential Despite Digital Growth
Governor Cardoso emphasized that while electronic payments are growing rapidly, cash continues to play a vital role in economic inclusion.
“Cash remains king. It is critical that this is maintained,” he said.
He stressed that digital payments, though increasingly important, cannot fully replace cash in daily transactions—especially in less urbanised areas where infrastructure and technology access remain limited.
A Growing Digital Ecosystem, But Cash Still Strong
Cardoso highlighted the significant expansion of Nigeria’s payment ecosystem over the past decade, driven by policy reforms, technological advancement, and changing consumer habits. He noted that electronic payments have surged, with transaction volumes rising by 276% and transaction values increasing by 581% over the last five years.
Despite this momentum, cash continues to dominate everyday transactions in informal markets, rural communities, and small business operations.
CBN data shows that total currency in circulation rose by 4.6% in 2025, underscoring sustained demand for physical cash even as digital alternatives expand.
Digital Channels Support Cash Access
The CBN governor acknowledged the role of digital and electronic channels in enhancing access to cash. He noted that ATMs, point-of-sale terminals, mobile wallets, and contactless solutions have helped decentralise cash distribution, reduce operational bottlenecks, and improve user experience.
He also revealed that the central bank is reviewing policy on the ratio of bank-issued cards to the number of ATMs in circulation, with clarity expected within the next few months after stakeholder engagements conclude.
Cash Availability Depends on More Than Currency
Cardoso highlighted that ensuring cash access is not just about printing money. It requires effective logistics, strong infrastructure, incentives, and coordination among financial institutions.
He also traced the evolution of money—from commodity forms to coins, paper, cards, and digital currencies—and insisted that the future of currency is not either digital or physical; it is both.
According to Cardoso, Nigeria’s payment system must maintain public confidence, ensure cash access, and deepen digital adoption to build a robust and inclusive financial ecosystem.
Industry Leaders Call for Coexistence of Cash and Digital Payments
Also speaking at the conference, Prof. Pius Olanrewaju, President of the Chartered Institute of Bankers of Nigeria (CIBN), said cash and digital payments must coexist as complementary pillars of the financial system. He noted that although electronic transactions exceeded 60 billion in 2025, cash remains essential for low-value transactions in informal and rural sectors, supporting livelihoods and inclusion.
Olanrewaju praised the CBN for expanding agent banking and strengthening digital infrastructure to promote trust and wider adoption of electronic payments nationwide.
CHBO Calls for Balanced Approach and Stronger Integration
The Chairman of CHBO, Mr. Abraham Aziegbe, represented by his First Vice Chairman, Mr. Tolulope Ogundipe, also advocated for balance. He stressed that cash remains indispensable, particularly in underserved and rural areas, despite rapid digital growth.
He noted that ATM withdrawals reached N36.34 trillion in the first half of 2025, underscoring the country’s continued reliance on cash for economic resilience and trust.
Aziegbe called for stronger integration of cash and digital channels, urging collaboration, innovation, and effective oversight to strengthen Nigeria’s financial ecosystem.