Nigeria’s money supply (M3) has skyrocketed to a historic peak.10 trillion** in April 2025, defying the Central Bank of Nigeria’s (CBN) aggressive monetary tightening measures aimed at taming inflation and stabilizing the naira.
Unprecedented Growth Amid Policy Tightening
The latest data from the CBN reveals a staggering 22.8% year-on-year (YoY) surge, up from N96.97 trillion in April 2024. Month-on-month (MoM), money supply expanded by 4.3%, climbing from N114.22 trillion in March 2025.
The M3 metric, which encompasses cash, demand deposits, savings accounts, and other liquid financial instruments, suggests that despite the CBN’s liquidity mop-up operations, money continues to flood the warn pressures, even as the apex bank maintains its hawkish stance.
CBN Governor Olayemi Cardoso has reiterated the bank’s commitment to price stability, but the widening money supply raises concerns about the effectiveness of current policies.
Credit Trends: Government Borrowing Dips, Private Sector Expands
A closer look at credit dynamics reveals a contradictory trend:
- Credit to the government fell 8.9% MoM to N23.55 trillion in April, down from N25.85 trillion in March. However, YoY, it still grew by 17.9% from N19.97 trillion in April 2024.
- Currency outside banks declined 26.94% YoY to N4.57 trillion, while dipping slightly (0.4% MoM) from N4.59 trillion in March.
- Currency in circulation, however, jumped 27.8% YoY to N5.01 trillion, though it saw a marginal 0.2% MoM dip from N5.00 trillion in March.
Private Sector Credit Hits N77.90 Trillion
In a positive sign for economic activity, credit to the private sector rose to N77.90 trillion, marking a **6.8% *2.15% MoM* increase. This suggests businesses are accessing more funds for expansion, potentially driving growth despite macroeconomic headwinds.
Economic Implications
The surge in money supply amid tightening policies presents a paradox. While the CBN battles inflation with high interest rates and liquidity controls, the persistent growth in M3 indicates underlying structural challenges—possibly driven by fiscal deficits, FX pressures, or informal sector dynamics.
Economists warn that if money supply continues expanding unchecked, inflation—which has remained stubbornly high—could see renewed upward pressure, complicating the CBN’s stabilization efforts.
