Credit to government declines to six-month low on ways and means’ halt

… Money supply hits record high of N110.98trn

… Currency in circulation rise to all-time high of N5.23trn

…Loans to private sector falls by N1.59trn in one year

Nigerian banks credit to the government declined to six-months low in January 2025 following a halt in Central Bank of Nigeria (CBN) ways and means.

Data from the CBN showed that credit to the government dropped to N24.51 trillion in January 2025, marking a 38.12 percent or N15.10 trillion decline compared to N39.61 trillion in November 2024. The lowest figure in six months was N19.82 trillion in July 2024.

The Federal Government last year took a decision to halt the use of Ways and Means advances, a practice previously employed to finance budget deficits through borrowing from the CBN.

Olayemi Cardoso, governor of the CBN in November 2024, highlighted deliberate policy changes, emphasising fiscal discipline and monetary stability. In his words, “Under my leadership, we have taken decisive steps to move away from these practices. We have ended years of fiscal deficits financed through CBN’s Ways and Means advances, reinforcing our commitment to price stability and promoting fiscal discipline.”

Money supply (M3) as measured by the broad monetary aggregate M3, hit a record high of N110.98 trillion in the first month of 2025, marking an increase of N2.02 trillion or 1.85 percent compared to N108.96 trillion in November last year.

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The data also showed that currency in circulation rose to an all time high of N5.23 trillion in January 2025. On a month-on-month basis, money in circulation increased by 7.4 percent or N360 billion from N4.87 trillion recorded in November 2024.

Bank loans to the private sector declined by N1.59 trillion year-on-year to N74.88 trillion in January 2025, marking a 2.08 percent drop from N75.96 trillion in November 2024. On a monthly basis, it also fell by 1.4 percent or N1.08 trillion from N75.96 trillion in November 2024.