Nigeria’s Money Supply Hits N110.97 Trillion

Nigeria’s money supply (M2) surged by 18.3% year-on-year, reaching N110.97 trillion in January 2025, compared to N93.77 trillion in January 2024. This growth was largely fueled by increased savings in various investment instruments.

According to the Central Bank of Nigeria (CBN), the rise in money supply was primarily driven by a 21% increase in quasi-money, which includes savings accounts, treasury bills, money market instruments, and foreign currency deposits. This data was published in the Money and Credit Statistics report released yesterday.

The report showed that quasi-money expanded to N74.07 trillion in January 2025, up from N61.2 trillion in the same period of 2024. Demand deposits also saw a 13.6% rise, reaching N32.15 trillion from N28.3 trillion year-on-year.

Currency outside banks recorded a significant jump, climbing 44.5% year-on-year to N4.74 trillion in January 2025 from N3.28 trillion in January 2024. Similarly, narrow money (M1) grew by 16.7% to N36.9 trillion from N31.6 trillion over the same period.

The increase in government borrowing played a key role in Nigeria’s growing debt profile, with total public debt rising by 6.0% quarter-on-quarter to N142.3 trillion in Q3 2024, as reported by the Debt Management Office (DMO).

The CBN data also revealed that credit to the government soared by 54% year-on-year to N24.51 trillion in January 2025, up from N23.51 trillion in the previous year. In contrast, credit to the private sector declined by 2.09%, dropping to N74.9 trillion from N76.5 trillion. Consequently, net domestic credit slipped by 0.5% year-on-year to N99.4 trillion in January 2025, compared to N99.9 trillion in January 2024.

Financial analysts at Cowry Asset Management Limited noted that the increase in public debt is largely attributed to a widening fiscal deficit resulting from government budget shortfalls and the persistent depreciation of the naira. They further highlighted that domestic debt issuance by the DMO to bridge fiscal gaps has significantly contributed to the rising debt stock.

The analysts cautioned that Nigeria’s fiscal outlook remains fragile, warning that economic stability is at risk unless meaningful structural reforms and revenue diversification strategies yield concrete results.