Friday, August 8, 2025 - Nigeria’s Money Supply (M²) dropped by 1.2 percent month-on-month (MoM) to N117.5 trillion in June 2025, from N118.9 trillion in May, representing the second consecutive month decline since April 2025.
This was contained in the latest Central Bank of Nigeria’s,
CBN’s Money and Credit Statistics Data , which indicated that the money supply
components also recorded decline during the period.
Quasi Money decreased by 1.27 percent MoM to N77.6 trillion
in June from N78.6 trillion in May.
Similarly, Currency outside Banks, COB fell by 2.17 percent
MoM to N4.5 trillion in June from N4.6 trillion in May.
Narrow money (M¹), also declined by 1.23 percent MoM to
N39.9 trillion in June from N40.4 trillion in May.
Likewise, demand deposits fell by 0.84 percent MoM to N35.4
trillion in June from N35.7 trillion in May.
The decline in money supply is reflected in banks’ credit to the government and
private sector.
The CBN’s data showed that credit to government decreased by
N1.37 trillion or 4.76 percent MoM to N23.7 trillion in June from N25.07
trillion in May.
According to the Debt Management Office (DMO), Nigeria’s
public debt Year-on-year, widened by 22.7 percent to N149.39 trillion,
reflecting continued fiscal reliance on debt to cover budgetary gaps amid
lukewarm revenue growth and high expenditure pressure.
The country’s 2025 budget is fixed at N54.99 trillion with
the federal government projected to generate a revenue of N41.81 trillion and
the deficit of N13.08 trillion will be funded through borrowing.
Analysts however projected increase external government
borrowings in the remaining half of the year to cover budget deficit.
In their mid-year outlook for 2025, analysts at
CardinalStone Securities Limited said: “Nigeria mostly relied on the domestic
market for deficit financing in H1’25, but we expect a notable increase in
external sourcing in H2’25.
“Precisely, the government has set its sights on raising
$1.2 billion through the DMO and a further $2 billion at concessionary rates
through multilateral sources.
“These numbers suggest that a cumulative of N4.9 trillion
(using the official exchange rate of $1,530/$ as at June 1, 2025) may be
sourced from abroad, with the balance of N5.19 trillion likely to be raised
from the domestic market after catering to rollovers.
“We are of the view that a part of the external borrowings
may be used to finance the $1.12 billion
“Eurobond maturity due in November and cumulative coupons of $1.38 billion.
“An upside risk to our fiscal outlook is increased the
Nigerian National Petroleum Company Limited, NNPCL, remittances to the
Federation Account, particularly if the government accelerates the settlement
of its N1.7 trillion outstanding obligation to the company.
“Currently, remittances are estimated at just 50 percent,
reflecting unresolved subsidy-related claims.
“We note that the government is also seeking National Assembly approval for $21
billion, €2.20 billion, and ¥15 billion for project financing in relation to
the Medium Term Expenditure Framework, MTEF, in the medium term.
“This development suggests that foreign borrowings will
remain critical to Nigeria’s deficit financing in the medium term.
Credit to the private sector also declined by 2.18 percent
MoM to N76.13 trillion in June from N77.83 trillion in May .
This resulted in a 2.9 percent MoM fall in net domestic credit of N99.9
trillion in June from N102.9 trillion in May.
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