Money supply surges 51% YoY to N108.96 trillion amid rising debts – CBN 

This increase represents a sharp rise from the ₦72.03 trillion recorded in the same period of 2023, according to the Central Bank of Nigeria (CBN)’s Money and Credit Statistics released on Monday.

M2 encompasses cash and demand deposits, savings deposits, money market deposits, and time deposits, serving as a broad measure of liquidity in the economy.

While M2 witnessed sustained growth over six consecutive months from April 2024, the trend briefly reversed in October 2024, declining by 1.5% month-on-month (MoM) to ₦107.7 trillion from ₦109.4 trillion in September. However, the supply rebounded by 1.2% in November, reaching ₦108.96 trillion.

The YoY surge in Broad Money Supply was driven by positive movements in its core components, highlighting a broader liquidity expansion across various financial instruments:

The CBN data also revealed a notable increase in credit allocation across the government and private sector:

This combined growth in domestic credit resulted in a massive 91% YoY rise in net domestic credit, which soared to ₦115.6 trillion in November 2024 from N60.5 trillion in the corresponding period of 2023.

The surge in money supply reflects increased government reliance on domestic borrowing to finance fiscal deficits, potentially fueling inflationary pressures. While the rising liquidity supports economic activities, it also stresses the need for balanced fiscal and monetary policies to sustain economic growth without exacerbating inflation.

As the Federal Government continues to grapple with fiscal challenges, experts suggest that a cautious approach is necessary to manage the liquidity expansion and its long-term impact on Nigeria’s economy.