Nigeria’s Broad Money Supply (M2) recorded a significant 51% year-on-year (YoY) increase, reaching N108.96 trillion in November 2024, up from N72.03 trillion in the same month of 2023. This surge in M2, which includes cash, demand deposits, savings deposits, money market deposits, and time deposits, reflects the continued high domestic borrowing by the Nigerian government from the private sector.
The latest data from the Central Bank of Nigeria (CBN) indicates a six-month upward trend in M2 since April 2024, although a slight dip occurred in October, with M2 decreasing by 1.5% to N107.7 trillion. However, the money supply rebounded in November, rising by 1.2% to N108.96 trillion.
Other components of the money supply also showed growth, with **Quasi-money**—including savings deposits, time deposits, and near-money assets—growing by 1.96% YoY to N72.7 trillion, compared to N71.3 trillion in November 2023. **Demand Deposits** saw a substantial 34.4% YoY increase, reaching N31.6 trillion in November 2024 from N23.2 trillion a year earlier.
Furthermore, **Currency outside banks** rose by 50.9% YoY to N4.65 trillion, up from N3.08 trillion in November 2023.
The report also highlights a notable increase in **Narrow Money (M1)**, which grew by 38% YoY to N36.3 trillion in November 2024, up from N26.3 trillion in November 2023.
In terms of credit, the CBN reported a 54% YoY increase in **credit to the government**, which reached N39.6 trillion in November 2024, compared to N25.7 trillion in November 2023. **Credit to the private sector** rose by 27% YoY to N75.96 trillion, up from N59.7 trillion in the previous year.
As a result, **Net Domestic Credit** surged by 91% YoY, reaching N115.6 trillion in November 2024, up from N60.5 trillion in the corresponding period of 2023.
Looking ahead, analysts at Afrinvest West Africa Limited have noted that the Nigerian government’s borrowing in 2024 could reach N41.5 trillion, which would contribute to a total national debt of approximately N138 trillion. They also projected that Nigeria’s budget deficit could exceed the forecasted N9.2 trillion by as much as 72.8%, due to underperformance in crude oil output and ongoing debt servicing obligations.
These developments underscore the growing challenges for Nigeria’s economy in balancing government expenditure and debt servicing amidst fluctuating revenue streams.
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