The Nigerian populace demonstrated a marked and sustained reliance on physical currency during the first quarter of 2025, with the total value of Automated Teller Machine (ATM) withdrawals surging to a staggering ₦15.97 trillion. This immense sum, moved between January and March, represents a nearly threefold increase—a dramatic 192.7% rise compared to the ₦5.46 trillion withdrawn during the same period in 2024.
The scale of this cash utilisation is particularly noteworthy given the simultaneous introduction of new Central Bank of Nigeria (CBN) charges. In February 2025, the central bank revised its fee structure, effectively scrapping the allowance for three free monthly interbank ATM withdrawals known as ‘Not-On-Us’ transactions and replacing it with a fresh regime of charges. The revised policy, which took full effect in March, now mandates a fee of ₦100 per ₦20,000 withdrawn at another bank’s ATM located within the bank’s premises, with off-site ATMs potentially attracting an additional surcharge of up to ₦500. This policy was intended to help banks recoup rising operational costs and subtly nudge customers towards digital payment channels.
Economic Impact and Consumer Adaptation
However, the latest CBN figures indicate that rather than discouraging the use of ATMs, the new fee structure has merely altered consumer behaviour. While the total number of transactions rose significantly up 95.3% to 411.42 million transactions in the quarter the growth in the total value of withdrawals overwhelmingly outpaced the growth in volume.
This divergence is a direct economic indicator of customer adaptation. Customers are consolidating their cash requirements into fewer, larger transactions to minimise the total cost incurred from multiple service charges. A granular look at the data confirms this trend: the average sum withdrawn per transaction has climbed sharply from roughly ₦32,660 in January to well over ₦44,500 by March. Compared to the previous year, the average withdrawal value has increased by approximately 89%.
This phenomenon is intrinsically linked to the country’s high-inflation environment. With consumer price growth remaining elevated, households and small businesses require a significantly greater volume of Naira to cover their basic expenses and operational costs compared to the previous year. The minimum amount of cash deemed useful for everyday retail transactions has increased, directly pushing up the average withdrawal amount.
The data thus highlights a critical economic friction: the intense pressure of rising prices is a far greater factor than the disincentive of new bank charges, revealing a deep-seated and growing dependence on physical cash, especially within the vast informal economy where digital payment adoption struggles to displace tangible currency. For the banking sector, the surge means higher fee revenues from interbank withdrawals, but also greater operational pressure on ATM networks and cash logistics. The ultimate takeaway is that the economic reality of soaring living costs is the dominant force driving consumer financial conduct.
