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FG’s borrowings push money supply to record ₦108.96 trillion – CBN

Nigeria’s Broad Money Supply (M2) jumped by 51% year-on-year, reaching ₦108.96 trillion in November 2024, largely driven by the Federal Government’s borrowings from the private sector, according to the Central Bank of Nigeria (CBN).

This marked a significant rise from ₦72.03 trillion recorded in November 2023.

The CBN’s Money and Credit Statistics report released on Monday, December 30, highlighted a six-month upward trend in M2, which momentarily declined in October before rebounding by 1.2% in November.

“Broad Money Supply represents cash, demand deposits, savings deposits, and time deposits,” the report clarified.

Quasi-money, which includes savings and time deposits, saw a marginal rise of 1.96% to ₦72.7 trillion.

Demand deposits surged by 34.4% year-on-year to ₦31.6 trillion, while currency outside banks soared by 50.9% to ₦4.65 trillion.

Narrow money (M1), which combines cash and demand deposits, recorded a 38% increase to ₦36.3 trillion.

The report also revealed that credit to the government spiked by 54% year-on-year to ₦39.6 trillion, up from ₦25.7 trillion in 2023.

Similarly, private sector credit climbed by 27% to ₦75.96 trillion, contributing to a 91% rise in net domestic credit to N115.6 trillion.

These figures underscore the impact of government borrowing on monetary expansion. Analysts have raised concerns about its implications for inflation and economic stability.

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