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Home News Just In: Money supply in Nigeria crosses N50 trillion in October 2022
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Just In: Money supply in Nigeria crosses N50 trillion in October 2022

Nigeria’s money supply (M2), according to the Central Bank of Nigeria’s (CBN) Money and Credit Statistics, increased to N50.5 trillion as of the fourth quarter of 2022. It increased by N1.26 trillion in October, making it the third-highest month after April (N47.1 trillion) and May (48.5 trillion).

In contrast to the N44.4 trillion in 2021, M2 increased by N6.1 trillion and is on its path to more than the N6.6 trillion recorded in 2021. The increase also makes it the highest monetary-related statistic by Nigeria’s central bank or any other central bank in the world.

This is a result of the low-interest policy CBN put in place to boost economic growth, its intervention funds and the bailouts of federal and state governments. This resulted in an imbalance between the naira and the dollar.

The imbalance between the two currencies can result in two things for the country. Firstly, it can mean economic growth. This is because an increase in money supply in a depressed or recessed economy tends to revive the economy. On the other hand, an increase in the money supply might lead to an inflated economy.

In the case of Nigeria, there is high inflation and compounding it with an increase in the money supply calls for an urgent solution.

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What the increase in Money Supply means for Nigeria

M2 is the money in circulation, bank deposits, and investments. From the October data from the CBN, Quasi money (money invested in liquid assets) was N29.2 trillion, bank deposit was N18.4 trillion, and money in circulation was N2.8 trillion. Out of the N6.1 trillion, demand deposits generated N3.3 trillion. 

With the threatening increase in the M2 on the economy, the apex bank will discuss the best way to control the economic situation in their meeting slated for today and tomorrow, November 22, 2022.

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