Nigeria is preparing for the most consequential reset of its cash policies in more than a decade, a recalibration that will touch everyone from small-market traders to multinationals, fintechs, and the banks that still form the backbone of Africa’s largest economy. In a new circular released on December 2, 2025, the Central Bank of Nigeria (CBN) laid out a sweeping set of changes scheduled to take effect on January 1, 2026 — changes that signal not just regulatory housekeeping, but a deeper ideological shift in how the country wants money to move.
The document reads like a pivot point. For years, Nigeria’s “cashless policy” has been a tug-of-war between aspiration and reality: policymakers have tried to throttle cash usage while the public, constrained by infrastructure gaps and trust issues, pushed back by clinging tightly to physical Naira notes. This time, the central bank has chosen a different strategy — loosen one end of the rope, tighten the other.
Cash Deposits Are Free Again — A Quiet Concession to the Real Economy
At the top of the changes is a move many didn’t see coming: the CBN has abolished the cumulative cash-deposit limit and the fees tied to it. For years, individuals and corporates depositing large sums were penalized in the name of discouraging cash hoarding. That framework is now gone.
It’s a rare acknowledgement that Nigeria’s formal economy still depends heavily on “over-the-counter liquidity” — the daily churn of cash from buses, markets, small shops, and cash-driven supply chains. Removing the deposit charges won’t solve the structural issues behind Nigeria’s cash dependence, but it removes friction for millions who move physical money simply because digital rails remain unreliable or out of reach.
Withdrawals, However, Are About to Get More Expensive — and Much Harder
If deposits were given a soft landing, withdrawals have been placed squarely in regulatory crosshairs. The CBN now caps cumulative weekly withdrawals at ₦500,000 for individuals and ₦5 million for corporates, a ceiling that will force high-cash businesses into uncomfortable recalculations. Exceeding the limit draws steep penalties: 3% on individuals, 5% on corporates. The fees are split between the CBN and banks, turning enforcement into a shared incentive system.
ATMs aren’t exempt. Customers can access no more than ₦100,000 a day — and not more than ₦500,000 a week — with ATM and POS withdrawals counted as part of the same ceiling. The special authorizations that once allowed individuals and corporates to withdraw ₦5 million and ₦10 million per month have been scrapped entirely.
This isn’t policy fine-tuning. It’s a deliberate narrowing of Nigeria’s cash spigot at a time when the government is betting on digital channels — and digital oversight — to plug revenue leakages, curb illicit flows, and stimulate the formal economy.
A More Watchful Regulator, Cleaner Data, Fewer Loopholes
The circular introduces new monthly reporting obligations for banks, requiring detailed accounts of large withdrawals and deposits. It also mandates dedicated internal ledgers for tracking fees collected from excess withdrawals, a move designed to eliminate the ambiguity that previously allowed banks to under-report or misallocate such charges.
Even exemptions are being rewritten. While revenue-generating government accounts and microfinance institutions retain special status, embassies, diplomatic missions, and donor agencies — groups once shielded from cash restrictions — are now being pulled under the same rulebook as everyone else.
And in a sweeping cleanup exercise, the CBN has officially scrapped dozens of older circulars dating back to 2011, many of which conflicted with or duplicated newer policies. The result is a leaner, clearer regulatory landscape — the first in years.
The Larger Story: A Nation Caught Between Cash Reality and Digital Ambition
Nigeria’s cash reforms come at a complicated moment. Digital payments have exploded over the last decade, powering one of Africa’s most dynamic fintech sectors. But the cash economy — sprawling, informal, fragmented — still dominates. Markets, transport hubs, rural communities, and even urban cash-intensive businesses rely on physical money not out of preference, but necessity.
The new rules are less about eliminating cash and more about reshaping its flow: make it easier to deposit, harder to withdraw, and more transparent to track. It’s a model designed for a country trying to modernize without destabilizing the economies that run beneath the surface.
For fintechs, this is an opportunity. For banks, a compliance marathon. For businesses built on daily cash turnover, a wake-up call.
What’s clear is that January 2026 won’t just introduce new limits — it will test Nigeria’s readiness for a digital-first economy, and reveal just how far the country has come on its long, uneven journey away from cash.
