Nigeria’s money supply (M2) fell slightly to ₦118.99 trillion in May 2025, representing a 0.23% month-on-month (MoM) decline from ₦119.27 trillion recorded in April.
This is according to the latest Money and Credit Statistics data released by the Central Bank of Nigeria (CBN) yesterday.
The report shows this is the third monthly decline in M2 recorded so far in 2025.
The decrease in money supply came amid a mixed performance in its components. While quasi-money and Currency Outside Banks (COB) increased, narrow money and demand deposits declined.
Quasi-money rose by 0.42% MoM to ₦78.6 trillion in May, up from ₦78.27 trillion in April. COB also increased by 0.87%, reaching ₦4.6 trillion from ₦4.56 trillion.
On the other hand, narrow money (M1) declined by 1.4% MoM to ₦40.4 trillion in May from ₦40.99 trillion in April. Demand deposits also fell by 1.89% to ₦35.74 trillion from ₦36.43 trillion.
The CBN data further revealed that the government borrowed ₦1.14 trillion in May. Credit to the government increased by 4.76% MoM to ₦25.07 trillion, up from ₦23.93 trillion in April — marking the first rise after two consecutive monthly declines since March.
Despite revenue-boosting efforts by fiscal authorities, Nigeria’s public debt has continued to grow. The Debt Management Office (DMO) reported that public debt rose by ₦2.35 trillion in Q4 2024, bringing the total debt stock to ₦144.67 trillion by the end of the year.
The federal government’s 2025 budget is set at ₦54.99 trillion, with projected revenue of ₦41.81 trillion. The resulting budget deficit of ₦13.18 trillion is expected to be financed through borrowing.
In a positive development, the International Monetary Fund (IMF) recently confirmed that Nigeria had fully repaid the $3.4 billion disbursed under the Rapid Financing Instrument (RFI) — a facility intended to cushion the effects of COVID-induced fiscal and balance of payments (BoP) pressures. This repayment includes $2.5 billion in Special Drawing Rights, equivalent to 100% of Nigeria’s IMF quota.
Analysts at Afrinvest West Africa Limited noted: “This affirms credit worthiness of Nigeria in keeping to loan terms and proves a healthy FX reserves buffer.”
However, in their May 2025 monthly update, Afrinvest analysts warned that the repayment does not resolve Nigeria’s broader fiscal issues.
“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.”
They added: “The implication is that concrete fiscal measures must be employed to ensure a sustainable fiscal outlook and external balance, especially considering recent adverse events in the oil sector.”
Highlighting oil revenue’s importance to the 2025 budget, the analysts stated: “Given that crude oil revenue is projected to deliver 47.7 per cent of the ₦40.9 trillion budgeted revenue for 2025, we estimate deficits could exceed ₦17 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.” They continued.
“We consider this necessary to effectively complement CBN’s effort at fostering real growth while maintaining price stability.” Afrinvest concluded.
Meanwhile, credit to the private sector dipped slightly by 0.32% MoM, falling to ₦77.83 trillion in May from ₦78.08 trillion in April. However, net domestic credit rose by 0.88% MoM to ₦102.9 trillion, up from ₦102 trillion in April.
