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Nigeria’s Money Supply (M2) has seen a significant increase, rising by 18.3 percent year-on-year to N110.97 trillion in January 2025, up from N93.77 trillion in the same period in 2024. This surge is largely attributed to increased savings in investment instruments by Nigerians, according to the Central Bank of Nigeria (CBN).

The CBN’s Money and Credit Statistics data reveals that the growth in money supply was driven by a 21 percent increase in Quasi Money, which includes savings accounts, treasury bills, and foreign currency deposits. Quasi Money grew to N74.07 trillion in January 2025, up from N61.2 trillion in January 2024.

Other notable increases include demand deposits, which rose by 13.6 percent to N32.15 trillion, and currency outside banks, which surged by 44.5 percent to N4.74 trillion. Narrow money (M1) also grew by 16.7 percent to N36.9 trillion.

However, the rise in government borrowing has led to a 6.0 percent quarter-on-quarter increase in Nigeria’s total public debt, reaching N142.3 trillion in the third quarter of 2024. Credit to the government increased by 54 percent to N24.51 trillion, while credit to the private sector dropped by 2.09 percent to N74.9 trillion.

Analysts at Cowry Asset Management Limited attribute the rise in public debt to a widening fiscal deficit and the depreciation of the naira. “Additionally, domestic debt issuance by the DMO to finance fiscal gaps contributed significantly to the rising debt stock,” they said. The analysts warn that Nigeria’s fiscal position remains precarious, with heightened risks to economic stability unless structural reforms and revenue diversification efforts yield tangible results.

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