Nigeria’s Money Supply Surges by 18% to N110.97 Trillion as Savings Boom
Nigeria’s money supply (M2) skyrocketed by 18.3% year-on-year (YoY), reaching N110.97 trillion in January 2025, compared to N93.77 trillion in the same period of 2024. This surge reflects increased savings by Nigerians in various investment instruments, signaling a growing appetite for wealth preservation and financial security.
Key Drivers Behind the Surge
According to the Central Bank of Nigeria (CBN), this rise was mainly driven by a 21% increase in Quasi Money—which includes savings accounts, treasury bills, money market instruments, and foreign currency deposits.
• Quasi Money: Up 21% YoY to N74.07 trillion (from N61.2 trillion in January 2024).
• Demand Deposits: Rose 13.6% YoY to N32.15 trillion (from N28.3 trillion).
• Currency Outside Banks: Jumped by a significant 44.5% YoY to N4.74 trillion (from N3.28 trillion).
• Narrow Money (M1): Increased by 16.7% YoY to N36.9 trillion (from N31.6 trillion).
Debt Levels on the Rise
The increase in money supply was also accompanied by a sharp rise in government borrowing. According to the Debt Management Office (DMO), Nigeria’s total public debt grew by 6% quarter-on-quarter (QoQ) to N142.3 trillion in Q3 2024.
• Credit to Government: Rose by 54% YoY to N24.51 trillion (from N15.9 trillion).
• Credit to Private Sector: Dropped by 2.09% YoY to N74.9 trillion (from N76.5 trillion).
• Net Domestic Credit: Fell by 0.5% YoY to N99.4 trillion (from N99.9 trillion).
Expert Insights
Analysts at Cowry Asset Management Limited attributed the debt surge to:
• Widening fiscal deficits caused by government budget shortfalls.
• Continued naira depreciation driving up borrowing needs.
• Increased domestic debt issuance by the DMO to fill fiscal gaps.
They also cautioned that Nigeria’s fiscal position remains fragile and stressed the need for structural reforms and revenue diversification to stabilize the economy.
What Does This Mean for Nigerians?
The rising money supply highlights growing confidence among Nigerians in savings and investment instruments. However, the simultaneous increase in public debt and reduction in private sector credit could strain economic growth unless the government implements effective reforms.
Investors and policymakers will be watching closely to see how these trends evolve and what measures the government will take to manage fiscal pressures and ensure economic stability.
Nigeria’s money supply (M2) skyrocketed by 18.3% year-on-year (YoY), reaching N110.97 trillion in January 2025, compared to N93.77 trillion in the same period of 2024. This surge reflects increased savings by Nigerians in various investment instruments, signaling a growing appetite for wealth preservation and financial security.
Key Drivers Behind the Surge
According to the Central Bank of Nigeria (CBN), this rise was mainly driven by a 21% increase in Quasi Money—which includes savings accounts, treasury bills, money market instruments, and foreign currency deposits.
• Quasi Money: Up 21% YoY to N74.07 trillion (from N61.2 trillion in January 2024).
• Demand Deposits: Rose 13.6% YoY to N32.15 trillion (from N28.3 trillion).
• Currency Outside Banks: Jumped by a significant 44.5% YoY to N4.74 trillion (from N3.28 trillion).
• Narrow Money (M1): Increased by 16.7% YoY to N36.9 trillion (from N31.6 trillion).
Debt Levels on the Rise
The increase in money supply was also accompanied by a sharp rise in government borrowing. According to the Debt Management Office (DMO), Nigeria’s total public debt grew by 6% quarter-on-quarter (QoQ) to N142.3 trillion in Q3 2024.
• Credit to Government: Rose by 54% YoY to N24.51 trillion (from N15.9 trillion).
• Credit to Private Sector: Dropped by 2.09% YoY to N74.9 trillion (from N76.5 trillion).
• Net Domestic Credit: Fell by 0.5% YoY to N99.4 trillion (from N99.9 trillion).
Expert Insights
Analysts at Cowry Asset Management Limited attributed the debt surge to:
• Widening fiscal deficits caused by government budget shortfalls.
• Continued naira depreciation driving up borrowing needs.
• Increased domestic debt issuance by the DMO to fill fiscal gaps.
They also cautioned that Nigeria’s fiscal position remains fragile and stressed the need for structural reforms and revenue diversification to stabilize the economy.
What Does This Mean for Nigerians?
The rising money supply highlights growing confidence among Nigerians in savings and investment instruments. However, the simultaneous increase in public debt and reduction in private sector credit could strain economic growth unless the government implements effective reforms.
Investors and policymakers will be watching closely to see how these trends evolve and what measures the government will take to manage fiscal pressures and ensure economic stability.