Nigeria’s long-running reliance on physical cash has once again come into sharp focus, as fresh data reveal a dramatic surge in automated teller machine (ATM) withdrawals despite deliberate policy measures by the Central Bank of Nigeria (CBN) to discourage cash usage.
Figures from the apex bank’s quarterly statistical bulletin show that Nigerians withdrew a total of ₦36.34 trillion from ATMs in the first half of 2025, underscoring the resilience of cash transactions even in the face of increased withdrawal charges and tighter monetary conditions.
The six-month figure represents a sharp jump from the ₦12.21 trillion recorded during the same period in 2024, translating to a year-on-year increase of nearly 198 per cent.
The data suggest that higher fees have done little to slow down the appetite for cash, particularly among households and small businesses that still depend heavily on physical money for daily transactions.
ATM withdrawals in Nigeria surge despite CBN’s cash-control measures
A closer look at the data shows that ATM withdrawals in Nigeria rose both in value and volume, reflecting sustained demand for cash across the economy.
Between January and June 2025, Nigerians carried out about 858.8 million ATM transactions, compared with 496.47 million withdrawals in the corresponding period of 2024.
This increase of more than 362 million transactions represents a growth rate of roughly 73 per cent, reinforcing the reality that higher withdrawal charges have not significantly altered consumer behaviour.
The surge occurred against the backdrop of the CBN’s revised ATM fee regime, which took effect in March 2025.
Under the new policy, customers withdrawing cash from ATMs belonging to other banks now pay ₦100 for every ₦20,000 withdrawn.
Additional surcharges of up to ₦500 per ₦20,000 apply to off-site ATMs located in shopping malls, fuel stations, airports, and similar high-traffic locations.
The revised framework also removed the long-standing allowance of three free monthly withdrawals from other banks’ ATMs, further increasing the cost of accessing cash.
According to the CBN, the changes were necessary to reflect rising operational costs and improve efficiency within the ATM network.
Despite these adjustments, quarterly figures indicate that cash withdrawals accelerated sharply. In the first quarter of 2025 alone, ATM withdrawals totalled ₦15.97 trillion, compared with ₦5.46 trillion in the same quarter of 2024.
Transaction volumes almost doubled, rising from 210.66 million to 411.42 million withdrawals.
The momentum strengthened in the second quarter, when Nigerians withdrew ₦20.36 trillion from ATMs, more than three times the ₦6.75 trillion recorded between April and June 2024.
Although transaction volumes grew at a slightly slower pace, the value of withdrawals remained elevated, pointing to larger cash withdrawals per transaction.
Monthly data further illustrate the steady climb in ATM withdrawals in Nigeria. January 2025 opened with ₦4.81 trillion in withdrawals, more than double the amount recorded a year earlier.
February and March followed the same pattern, with March withdrawals alone hitting ₦5.76 trillion, marking the strongest growth rate in the first quarter.
The second quarter sustained the trend, with May emerging as the peak month, when Nigerians withdrew ₦7.44 trillion from ATMs. Although June saw a slight moderation, withdrawals remained significantly higher than 2024 levels.
Analysts say the persistent demand for cash highlights deeper structural challenges in Nigeria’s payment ecosystem.
While electronic channels such as point-of-sale terminals and mobile banking platforms continue to expand, many Nigerians still prefer cash due to concerns around network reliability, transaction failures, and informal sector dominance.
Indeed, POS transactions remain the largest payment channel by value, rising from ₦85.91 trillion in the first half of 2024 to ₦147.20 trillion in the same period of 2025.
However, the growth rate of ATM withdrawals outpaced that of POS usage, signalling that cash continues to play a central role in everyday economic activity.
The policy has also sparked intense debate among stakeholders.
FinTech executives and consumer advocates argue that the revised ATM charges disproportionately affect low-income earners, who tend to make smaller, more frequent withdrawals.
Critics say wealthier individuals can simply withdraw larger sums less often, thereby minimising the impact of the fees.
Labour unions and civil society groups have echoed these concerns, describing the charges as unfair at a time when Nigerians are already grappling with rising living costs.
Some groups have even pursued legal action, arguing that the policy violates consumer protection principles and exacerbates financial exclusion.
On the other hand, some banking and consumer representatives have defended the move, noting that fee increases have occurred across multiple sectors of the economy.
They argue that the real issue is not the increase itself, but whether the charges are reasonable and affordable in the current economic climate.
Beyond consumer impact, the surge in ATM withdrawals in Nigeria has broader macroeconomic implications.
Data from the CBN show a steady rise in cash held outside the banking system, which climbed to ₦4.91 trillion in November 2025.
Currency in circulation also increased, with more than 93 per cent held outside banks.
Economists warn that high levels of cash outside the formal banking system weaken monetary policy transmission, reduce deposit mobilisation, and encourage informal transactions that escape regulatory oversight.
This trend complicates the CBN’s efforts to tighten liquidity and manage inflation effectively.
In response to mounting complaints, the CBN has introduced additional consumer-protection measures, including a directive requiring banks to refund failed ATM transactions within 48 hours.
The apex bank has also set new deployment standards, mandating banks to maintain at least one ATM for every 5,000 active cards over a phased compliance timeline.
While these reforms aim to improve efficiency and trust in the banking system, the latest data make it clear that cash remains deeply entrenched in Nigeria’s economic life.
For now, ATM withdrawals in Nigeria continue to surge, underscoring the limits of policy tools in reshaping consumer behaviour without addressing underlying structural and infrastructural challenges.
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