Nigeria’s Money Supply (M²) reached N118.99 trillion in May 2025, representing a 0.23 per cent month-on-month MoM decline from N119.27 trillion in April 2025.
The latest Central Bank of Nigeria’s (CBN) Money and Credit Statistics Data, published yesterday, showed that this was the third decline in M² recorded this year since January.
The data also indicated that the MoM fall in money supply followed mixed performance in its components.
Quasi-money, including Currency Outside Banks (COB), rose, while narrow money and demand deposits declined.
Quasi Money grew by 0.42 per cent MoM to N78.6 trillion in May from N78.27 trillion in April.
Similarly, COB increased slightly by 0.87 per cent MoM to N4.6 trillion in May from N4.56 trillion in April.
But Narrow money ( M¹) declined by 1.4 per cent MoM to N40.4 trillion in May from N40.99 trillion in April.
Likewise, demand deposits fell by 1.89 per cent MoM to N35.74 trillion in May from N36.43 trillion in April.
Meanwhile, the CBN’s data showed that the government borrowed N1.14 trillion in one month.
Analysis of the data showed that credit to the government grew by N1.14 trillion or 4.76 per cent MoM 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 despite increased revenue collection measures implemented by fiscal authorities.
According to the Debt Management Office (DMO), Nigeria’s public debt rose by N2.35 trillion in the fourth quarter of 2024, bringing the total debt stock for the year to N144.67 trillion.
The country’s 2025 budget is fixed at N54.99 trillion, with the federal government projected to generate a revenue of N41.81 trillion. The deficit of N13.18 trillion will be funded through borrowing.
Recently, the International Monetary Fund confirmed Nigeria’s full principal repayment of $3.4 billion ($2.5 billion in Special Drawing Rights, equivalent to 100 per cent of its quota) under the Rapid Financing Instrument (RFI), disbursed to address COVID-induced fiscal financing and Balance of Payments (BoP) stress.
“This affirms affirms credit worthiness of Nigeria in keeping to loan terms and proves healthy FX reserves buffer”, analysts from Afrinvest West Africa Limited said.
In their May 2025 monthly update, they noted that the full principal repayment under RFI is not a solution to the country’s current fiscal challenges. Hence, an urgent step is needed to replace historic fiscal expansionism with a more prudent framework that prioritises sustainable budget growth and is capex intensive.
“The RFI repayment is not a silver bullet for the current fiscal challenges as IMF debt stock accounts for only 3.6 per cent and 1.7 per cent 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.
“Given that crude oil revenue is projected to deliver 47.7 per cent of the N40.9 trillion budgeted revenue for 2025, “we estimate deficits could exceed N17 trillion in 2025, pushing total debt stock to N180.0 trillion (c.60 per cent of GDP). “Taking a cue from 2024, where Nigeria spent N11 trillion (52.9 per cent of total revenue in the period) on debt servicing, there is an urgent need to replace historic fiscal expansionism with a more prudent framework that prioritises sustainable budget growth and is capex intensive.
“We consider this necessary to effectively complement CBN’s effort at fostering real growth while maintaining price stability.”
On the other hand, credit to the private sector fell slightly by 0.32 per cent MoM to N77.83 trillion in May from N78.08 trillion in April.
This resulted in a 0.88 per cent MoM rise in net domestic credit of N102.9 trillion in May from N102 trillion in April.
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