By Damilola Adeleke

The Federal Government’s borrowing spree has significantly increased Nigeria’s Broad Money Supply (M2) by 51% year-on-year, rising to N108.96 trillion in November 2024 from N72.03 trillion in the same period of 2023.M2, which covers cash, demand deposits, savings deposits, money market deposits, and time deposits, grew mainly due to increased government borrowing from the private sector, as shown in recent Central Bank of Nigeria (CBN) statistics.

Though M2 dipped slightly in October, falling 1.5% to N107.7 trillion, it rebounded in November, recording a 1.2% month-on-month increase.Highlights from the Data:Currency Outside Banks surged by 50.9%, reaching N4.65 trillion compared to N3.08 trillion in November 2023.Narrow Money (M1) grew by 38% year-on-year to N36.3 trillion from N26.3 trillion.Quasi Money increased marginally by 1.96%, hitting N72.7 trillion.Demand Deposits recorded a 34.4% increase to N31.6 trillion from N23.2 trillion.The statistics also revealed a 54% year-on-year jump in credit to the government, now standing at N39.6 trillion, while credit to the private sector rose by 27% to N75.96 trillion.

These changes led to a 91% year-on-year rise in net domestic credit, which climbed to N115.6 trillion from N60.5 trillion in November 2023.

Analysts’ Projections

Experts at Afrinvest West Africa Limited noted that the Federal Government has borrowed approximately N41.5 trillion domestically and externally in 2024. With this, Nigeria’s total debt is projected to hit N128 trillion, while the cumulative national debt could reach N138 trillion.

Despite gains in non-oil revenue, underperforming crude oil production—averaging 1.4 million barrels per day versus the budgeted 1.78 million—remains a major risk to revenue. Debt servicing accounted for 43.7% of expenditures, followed by non-debt recurrent spending at 28.9%.

Analysts estimate that the actual deficit for 2024 could exceed the budgeted N9.2 trillion by over 72%, should the N35.1 trillion expenditure plan be fully implemented.