Digital Payments Driving Scarcity of Coins, Small Naira Notes - CBN Governor

Cardoso Explains Scarcity of Coins, Lower-Denomination Naira Notes

The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has dismissed speculation that coins and lower-denomination naira notes have been withdrawn from circulation, explaining that their apparent scarcity reflects changing consumer payment habits rather than any policy decision by the apex bank.

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Speaking after the 306th Monetary Policy Committee (MPC) meeting, Cardoso said the reduced visibility of coins and smaller denominations is largely a function of demand within Nigeria's evolving payment ecosystem. As electronic transfers, mobile banking and other digital payment channels become more widely used, demand for lower-value cash has naturally declined.

He stressed that all existing coins and lower-denomination banknotes remain legal tender and can still be used for transactions across the country. According to the CBN Governor, there has been no directive to phase out or demonetise any denomination currently in circulation.

Digital Payments Reshaping Currency Demand

Cardoso said Nigeria's payment landscape has changed significantly in recent years as financial inclusion initiatives and digital banking services continue to expand.

The increasing use of mobile banking applications, point-of-sale terminals and electronic transfers has reduced reliance on physical cash, particularly for low-value transactions that traditionally depended on coins and smaller banknotes. As a result, banks and businesses now request fewer lower denominations from the CBN compared with higher-value notes.

The Governor explained that currency circulation is largely influenced by public demand, and the central bank adjusts its currency management operations to reflect changes in transaction patterns across the economy.

No Plans to Withdraw Existing Denominations

Responding to public concerns, Cardoso reiterated that the scarcity of smaller denominations should not be interpreted as a withdrawal of those notes or coins.

He urged Nigerians to continue accepting and using lower-denomination notes whenever they are available, noting that they remain valid legal tender under Nigerian law. The CBN, he said, remains committed to providing a range of secure and efficient payment options, including both cash and electronic channels.

His clarification comes amid growing public discussion over the reduced circulation of coins and denominations such as the ₦100 and ₦200 notes, particularly in urban areas where digital payments have become increasingly dominant.

Implications for Housing and Real Estate

For Nigeria's housing and real estate sector, the continued shift towards digital payments reflects broader changes in the country's financial ecosystem.

Electronic transactions are becoming increasingly common across property management, rent collection, mortgage repayments and construction procurement, improving transparency and reducing the risks associated with handling large volumes of cash. Developers, estate managers and financial institutions are also benefiting from faster and more traceable payment systems.

However, cash remains important within parts of the construction value chain, particularly among artisans, small contractors and suppliers operating in the informal sector. Maintaining an adequate supply of all currency denominations therefore remains essential to supporting transactions in areas where digital payment infrastructure is still developing.

Outlook

The CBN's clarification suggests that Nigeria's currency management strategy is evolving alongside the country's rapid adoption of digital financial services rather than moving towards the elimination of smaller denominations.

As electronic payments continue to expand, demand for lower-value cash may decline further. Nevertheless, ensuring that all denominations remain available where needed will be important for supporting financial inclusion, facilitating informal sector transactions and maintaining confidence in Nigeria's payment system. For the housing sector, the continued growth of digital payments is expected to improve efficiency in property transactions while complementing, rather than replacing, cash-based activities in parts of the construction industry.

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