Nigeria's Money Supply Expands as Government Borrowing Declines - CBN Report

Nigeria's money supply saw significant changes in August 2025, with broad money M3 expanding while government borrowing decreased by 25.74% year-on-year. The Central Bank of Nigeria (CBN) reported that M3 rose to N trillion, driven by a stronger balance and increased foreign assets, indicating growing liquidity in the financial system.

Meanwhile, narrow money M1 remained relatively smaller at N trillion, showing a preference for safer funds over physical currency. Credit to the government contracted to N trillion, reflecting reduced government borrowing.

This shift suggests a redirection of liquidity towards deficit financing and credit to the private sector, which remained modest at N trillion. The dynamic between expanding liquidity and declining government borrowing is producing mixed effects on the economy.