Nigeria’s broad money supply surged to an all-time high of N93.72 trillion as of January 2024, representing a 76% surge from the N53.14 trillion recorded in January 2023.
Available data from the Central Bank of Nigeria (CBN) on the money in circulation during the month under review showed that the supply also reflected an increase of 19% when compared to the quantum of money supply in December 2023, which stood at N78.74 trillion.
According to the money and credit statistics by the apex bank, there has been a surge in broad money supply (M3), which comprises both net foreign assets and net domestic assets, over the past few years with the attendant negative implications for the general price level in the economy.
The surge in M3 has been lingering for years despite sustained efforts by the CBN to tighten monetary policy and mop up excess liquidity.
For instance, the apex bank jerked up the MPR from 11.5% in May 2022 to 18.75% as of July 2023, an increase of 725 basis points in slightly over one year.
Economists have noted this was largely responsible for the surging inflation rate of the country as well as mounting pressures on the Naira’s exchange rate, the weakening purchasing power of ordinary Nigerians, and dearth of viable investment prospects, amongst other negative economic indices.
With preparations for the CBN Monetary Policy Committee’s (MPC’s) meeting in top gear, analysts believe that the Committee (MPC) should prioritize the money supply issue in its agenda in order to ensure Nigeria’s economic stability and growth.
