The Central Bank of Nigeria has reported a dramatic increase in the country's money supply, which surged by 75.9% over a two-year period to reach N117.78 trillion.
Unprecedented Growth in Money Circulation
According to the latest Money and Credit report from the CBN, Nigeria's money supply climbed from N66.94 trillion in September 2023 to N117.78 trillion in September 2025. This represents one of the most significant increases in recent monetary history.
The data reveals even more striking growth when examined quarterly. In the first quarter of 2025 alone, money supply skyrocketed by 112% to N115.815 trillion from N54.628 trillion during the same period in 2023.
Government Borrowing Drives Expansion
Financial analysts attribute this substantial monetary expansion to the government's increasing dependence on bank financing. Credit to the government grew by 9.1% over the two-year period, rising from N22.137 trillion in September 2023 to N24.158 trillion.
However, the data also shows a complex picture of banks' credit to the government, which has experienced fluctuations. A year-on-year analysis indicates that banks' credit to the government declined by 38.8% in September 2025, falling to N24.2 trillion from N39.5 trillion in September 2024.
Economic Implications and Expert Warnings
David Adonri, Analyst and Executive Vice Chairman at High Cap Securities Limited, explained to Vanguard that the money supply increase carries dual implications for the Nigerian economy.
"The expansion can stimulate economic growth through lower interest rates that drive spending and investment," Adonri noted. "However, if the increase outpaces economic growth, it could lead to inflation."
This warning echoes concerns among economic observers who note that when money in circulation surpasses available goods and services, purchasing power diminishes, potentially triggering inflationary pressures that could affect ordinary Nigerians.
The CBN's Deputy Governor for Corporate Services, Emem Usoro, recently provided an update on the economy, suggesting that monetary reforms under the current leadership have helped stabilize the Naira and foreign exchange rates. The presidency has also highlighted gains from economic reforms in areas including budget deficit management, capital spending, and foreign exchange reserves.
As Nigeria navigates this period of monetary expansion, economists will be closely monitoring whether the increased money supply translates into sustainable economic growth or becomes a driver of inflation that could undermine recent economic gains.
