Nigeria’s Broad Money Supply (M2) saw an impressive 51% year-on-year (YoY) growth, climbing to N108.96 trillion in November 2024. This surge, primarily driven by Federal Government borrowing from the private sector, reflects deepening fiscal challenges linked to domestic borrowing. Data from the Central Bank of Nigeria (CBN) Money and Credit Statistics revealed this increase from N72.03 trillion recorded in November 2023. Understanding Broad Money Supply (M2) Broad Money Supply (M2) includes various monetary components such as cash, demand deposits, savings deposits, time deposits, and money market deposits, which collectively indicate liquidity within the economy. Trends in Money Supply The CBN reported a consistent six-month growth in M2 from April 2024. However, there was a slight drop in October, with M2 falling month-on-month (MoM) by 1.5% to N107.7 trillion from September’s N109.4 trillion. The trend reversed in November, as M2 grew by 1.2%, reaching N108.96 trillion. Breakdown of Growth Components The YoY growth in M2 was fueled by increases across key components: Credit Allocation Increases The report highlighted substantial credit expansions: Implications and Policy Recommendations This sharp rise in money supply underscores the growing reliance on domestic borrowing. While it meets short-term financing needs, unchecked borrowing can lead to inflationary pressures, higher interest rates, and long-term economic instability. To mitigate these risks, there is an urgent need for improved fiscal discipline and effective monetary policy to balance liquidity and economic stability. READ ALSO: Follow the LMSINT MEDIA channel on WhatsApp: Join Our WhatsApp Group Hear: Chat on WhatsApp Join our Telegram Chanel.
