2027 elections loom as CBN targets N2.83trn cash outside banking system

As Nigeria approaches the 2027 general elections, the Central Bank of Nigeria has unveiled an ambitious plan to draw an estimated N2.83tn currently held outside the banking system into formal financial channels, a move that could significantly influence both the economy and the country’s cash-driven political landscape.

The initiative, announced in Abuja by CBN Governor Olayemi Cardoso, forms part of the Nigeria Payments System Vision 2028, a strategic framework designed to deepen digital payments, expand financial inclusion, and reduce dependence on physical cash.

The timing of the policy has drawn attention, coming months before the Independent National Electoral Commission is scheduled to conduct the 2027 general elections. With presidential and National Assembly polls set for January 16 and governorship elections for February 6, concerns are already mounting over the role of cash in campaign financing and vote-buying.

Nigeria’s elections have long been associated with heavy cash transactions, often conducted outside formal financial systems.

By targeting the large volume of money held outside banks, the CBN’s plan could indirectly curb the liquidity that fuels such practices, while increasing transparency in financial flows.

Recent data from the apex bank underscores the magnitude of the challenge. As of April 2026, about N5.08tn—more than 90 per cent of the country’s total currency in circulation—was held outside the banking system.

Cardoso said the goal is to reduce this figure to less than 40 per cent by 2028. Based on current figures, that would mean pulling roughly N2.83trn back into the formal financial system, significantly boosting banking sector liquidity and strengthening the effectiveness of monetary policy.

He emphasised that the era of cash dominance must give way to a more efficient and transparent system, declaring that “cash should no longer be king.”

Alongside the cash recovery target, the CBN is pursuing one of its most ambitious financial inclusion drives yet. The bank aims to bring 50 million additional Nigerians into the formal financial system by 2028, pushing inclusion levels to 95 per cent.

Cardoso said the objective goes beyond financial transactions, describing it as a pathway to economic empowerment. He noted that efficient payment systems can help lift millions out of poverty by improving access to savings, credit, and market opportunities.

The vision is expected to draw more traders, farmers, and young people into the banking ecosystem, ensuring that economic participation is broadened across both urban and rural communities.

Despite the ambitious targets, the CBN acknowledged that trust remains a major barrier. Cardoso pointed to growing concerns over the reliability of payment channels, recalling instances where traders hesitated to accept certain forms of payment.

He stressed that strengthening confidence in digital systems would be critical to reducing reliance on cash and ensuring widespread adoption of electronic transactions.

The Payments System Vision 2028 is anchored on modernising infrastructure, encouraging innovation, improving cybersecurity, and integrating Nigeria more deeply into regional and global payment systems.

Officials say the framework will position Nigeria to take advantage of opportunities under the African Continental Free Trade Area, while also supporting small businesses with faster and more efficient transaction systems.

Ultimately, the success of the initiative will depend on execution. Cardoso made it clear that the vision is not merely a policy document but a national project that requires collaboration across regulators, financial institutions, telecom operators, and technology firms.

As Nigeria moves closer to the 2027 elections, the CBN’s push to reduce cash outside the banking system is shaping up as a critical test—not just of financial reform, but of whether the country can transition from a cash-heavy economy to a more transparent and digitally driven one.