Nigeria’s money supply dropped to N118.99 trillion in May 2025, representing a 0.23% month-on-month decline from N119.27 trillion in April 2025, according to the Central Bank of Nigeria’s (CBN) Money and Credit Statistics Data.
This marks the third decline in Nigeria’s money supply recorded this year since January.
The decline in money supply follows a mixed performance in its components. Quasi-money, including Currency Outside Banks (COB), rose, while narrow money and demand deposits declined.
Specifically, quasi-money grew by 0.42% to N78.6 trillion in May from N78.27 trillion in April, and COB increased slightly by 0.87% to N4.6 trillion in May from N4.56 trillion in April.
On the other hand, narrow money (M1) declined by 1.4% to N40.4 trillion in May from N40.99 trillion in April, and demand deposits fell by 1.89% to N35.74 trillion in May from N36.43 trillion in April.
Meanwhile, the government borrowed N1.14 trillion in one month, with credit to the government growing by 4.76% to N25.07 trillion in May from N23.93 trillion in April.
This represents the first increase after two consecutive months of decline since March.
Nigeria’s public debt has continued to rise, reaching N144.67 trillion in 2024, with a projected deficit of N13.18 trillion to be funded through borrowing in the 2025 budget.
Analysts from Afrinvest West Africa Limited noted that the full principal repayment under the Rapid Financing Instrument (RFI) is not a solution to the country’s current fiscal challenges.
“The RFI repayment is not a silver bullet for the current fiscal challenges as IMF debt stock accounts for only 3.6% and 1.7% of multilateral loans and total external debt stock as of 2024-end.
“The implication is that concrete fiscal measures must be employed to ensure sustainable fiscal outlook and external balance, especially considering recent adverse events in the oil sector,” they said.
Given the current fiscal challenges, analysts estimate that deficits could exceed N17 trillion in 2025, pushing total debt stock to N180 trillion, approximately 60% of GDP.
They emphasised the need for a more prudent framework prioritising sustainable budget growth and capital expenditure to complement the CBN’s efforts in fostering real growth while maintaining price stability.
SOURCE: tribuneonlineng.com