Nigeria’s money supply (M3) soared to an unprecedented N119.10 trillion in April 2025, defying the Central Bank of Nigeria’s (CBN) aggressive efforts to rein in liquidity and tame spiraling inflation, according to the latest data released by the apex bank.
The figure marks a staggering 22.8 percent year-on-year surge from N96.97 trillion in April 2024 and a 4.3 percent month-on-month increase from N114.22 trillion in March 2025, underscoring persistent liquidity pressures in Africa’s largest economy.
The M3 measure, which captures the broadest spectrum of money in circulation—including cash, demand deposits, savings accounts, and large time deposits—has been a focal point for policymakers as they grapple with balancing economic growth and inflationary risks.
The CBN has maintained a hawkish monetary policy stance, raising interest rates and tightening liquidity to stabilize the naira and curb inflation, which has remained stubbornly high amid rising food and energy costs. However, the latest data suggests that these measures have yet to fully dampen the rapid expansion of money in circulation.
The CBN’s report reveals mixed dynamics across other key monetary indicators. Credit to the government contracted by 8.9 percent month-on-month to N23.55 trillion in April 2025, down from N25.85 trillion in March.
This decline suggests a temporary pullback in government borrowing, possibly linked to fiscal consolidation efforts or reduced reliance on domestic debt markets. However, on an annual basis, credit to the government still climbed by 17.9 percent from N19.97 trillion in April 2024, reflecting sustained public sector financing needs over the longer term.
Meanwhile, currency outside banks—a proxy for cash circulating outside the formal banking system—declined significantly by 26.94 percent year-on-year to N4.57 trillion in April 2025, down from N3.60 trillion a year earlier.
A marginal month-on-month dip of 0.4 percent from N4.59 trillion in March further highlights a shift toward digital transactions and banking system deposits, a trend the CBN has actively promoted through its cashless policy initiatives.
In contrast, total currency in circulation painted a different picture, rising sharply by 27.8 percent year-on-year to N5.01 trillion in April 2025, up from N3.92 trillion in April 2024. This N1.09 trillion annual increase underscores the persistent demand for physical cash in Nigeria’s heavily informal economy, despite a slight 0.2 percent month-on-month decline from N5.00 trillion in March.
One of the brightest spots in the CBN’s report is the continued growth in credit to the private sector, which rose to N77.90 trillion in April 2025. This represents a 6.8 percent year-on-year increase from N72.91 trillion in April 2024 and a 2.15 percent month-on-month uptick from N76.26 trillion in March.
The sustained rise in private sector lending signals resilience in business activity, particularly in sectors such as manufacturing, agriculture, and services, which have benefited from targeted CBN interventions and commercial bank lending.
The record-high money supply poses a conundrum for the CBN as it seeks to balance inflation control with economic growth. Inflation, which stood at 33.69 percent in April 2025 according to the National Bureau of Statistics, remains a critical challenge, driven by supply chain disruptions, exchange rate volatility, and rising global commodity prices.
WHAT YOU SHOULD KNOW
Nigeria’s money supply (M3) surged to a record N119.10 trillion in April 2025, up 22.8% year-on-year and 4.3% month-on-month, despite the Central Bank of Nigeria’s tight monetary policy to curb inflation. While government credit contracted 8.9% monthly, private sector credit rose 6.8% annually to N77.90 trillion, signaling robust business activity.
Currency in circulation grew 27.8% year-on-year to N5.01 trillion, but currency outside banks fell 26.94% to N4.57 trillion. These mixed trends highlight the CBN’s challenge in balancing inflation control with economic growth amid persistent liquidity pressures and structural economic issues.
