Nigeria’s broad money supply (M3) climbed to a historic high of N119.10 trillion in April 2025, according to new data released by the Central Bank of Nigeria (CBN).
The report shows a year-on-year increase of 22.8%, up from N96.97 trillion in April 2024 and a month-on-month rise of 4.3% compared to N114.22 trillion recorded in March 2025.
The increase reflects growing monetary aggregates even as the CBN maintains a hawkish stance to combat inflation and restore macroeconomic stability.
The money supply M3 includes all components of narrow and broad money — such as cash, demand deposits, savings accounts, and large time deposits — making it the most comprehensive measure of liquidity within the financial system.
In parallel, credit to the private sector rose to N77.90 trillion, marking a 6.8% year-on-year increase from N72.91 trillion in April 2024. On a monthly basis, private credit expanded by 2.15%, up from N76.26 trillion in March.
The steady growth in private sector lending signals a sustained recovery in credit appetite and bank intermediation despite elevated interest rates.
Conversely, credit to the government contracted in April, falling 8.9% month-on-month to N23.55 trillion, down from N25.85 trillion in March. However, on a year-on-year basis, it still reflected a 17.9% increase from N19.97 trillion in April 2024.
The liquidity report also showed a divergence between currency in circulation and currency outside banks. Currency in circulation surged 27.8% year-on-year to N5.01 trillion, up from N3.92 trillion in April 2024. However, currency outside banks fell 26.94% annually to N4.57 trillion, with a slight 0.4% month-on-month dip from N4.59 trillion in March.
The CBN’s efforts to manage excess liquidity through interest rate hikes, open market operations, and sterilisation measures have had mixed results. While government credit is moderating and cash outside the banking system is declining, the overall money supply continues to expand — raising questions about underlying liquidity drivers, including rising net domestic assets and strong private credit expansion.
Analysts note that sustained M3 growth could counteract the inflationary containment goals of monetary policy if not matched with productivity gains or real sector absorption.
However, increased credit to the private sector may also reflect improved access to finance for businesses following ongoing banking sector reforms.
With headline inflation still elevated, the CBN is expected to maintain its tight monetary stance while closely monitoring systemic liquidity and credit dynamics.
The Monetary Policy Committee (MPC) is due to meet in June, with market participants expecting further signals on rate direction and liquidity management targets.
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