Nigeria’s broad money supply rose by ₦7.51 trillion in September 2026, with Central Bank of Nigeria (CBN) bills accounting for 74.4 per cent of the monthly increase, according to data from the apex bank. Read original
The figures show that broad money supply, measured by M3, increased by 5.40 per cent to ₦146.60 trillion in September, up from ₦139.09 trillion in August.
However, the increase was largely driven by a sharp rise in CBN bills held by money-holding sectors, rather than a comparable expansion in the narrower M2 measure of money supply.
CBN bills rose from ₦9.68 billion in August to ₦5.60 trillion in September, representing an increase of approximately ₦5.59 trillion in one month.
The development highlights the importance of examining the composition of Nigeria’s money supply when assessing liquidity conditions and the direction of monetary policy.
CBN Bills Account for 74.4% of Monthly Increase
According to the CBN’s monetary statistics, the increase in bills contributed approximately ₦5.59 trillion to the ₦7.51 trillion rise in M3 during the review period.
This means CBN bills accounted for 74.4 per cent of the monthly expansion, while the narrower M2 measure contributed the remaining 25.6 per cent.
Unlike M2, the broader M3 measure includes eligible CBN bills held by money-holding sectors.
The sharp increase in these instruments does not necessarily mean that an equivalent amount of fresh cash entered the economy. CBN bills are interest-bearing financial instruments used in liquidity management, and their inclusion in M3 affects the reported size of the monetary aggregate.
Nigeria’s M2 Money Supply Rises by 1.38%
While M3 recorded a significant monthly increase, Nigeria’s M2 money supply grew at a more moderate pace.
M2 rose by 1.38 per cent to ₦141 trillion in September from ₦139.08 trillion in August. On a year-on-year basis, the measure increased by 19.72 per cent from ₦117.77 trillion recorded in September 2025.
The M2 measure includes narrow money and quasi-money, covering currency, demand deposits and other relatively liquid savings and deposit balances.
Within the category, quasi-money increased by 1.03 per cent to ₦96.95 trillion from ₦95.97 trillion.
Narrow money, which captures more immediately spendable monetary balances, rose by 2.17 per cent to ₦44.05 trillion from ₦43.11 trillion.
Currency held outside banks also increased by 1 per cent to ₦4.92 trillion from ₦4.87 trillion, while demand deposits climbed by 2.32 per cent to ₦39.12 trillion from ₦38.24 trillion.
These figures indicate that cash holdings and transaction balances increased during the month, although the broader M2 measure recorded a much smaller expansion than M3.
Government Credit Surges as Private-Sector Lending Declines
The CBN data also show a significant increase in domestic credit, driven mainly by higher credit to the government.
Net domestic credit rose by 4.96 per cent to ₦123.34 trillion in September from ₦117.51 trillion in August.
Credit to the government increased by 19.26 per cent to ₦39.40 trillion from ₦33.04 trillion, representing an increase of approximately ₦6.36 trillion in one month.
Compared with September 2025, government credit rose by 63.09 per cent from ₦24.16 trillion.
In contrast, credit to the private sector declined by 0.64 per cent month-on-month to ₦83.93 trillion from ₦84.47 trillion.
Despite the monthly decline, private-sector credit remained higher than its level a year earlier, rising by 15.73 per cent from ₦72.53 trillion in September 2025.
The contrasting figures show that government credit expanded significantly in September, while lending to businesses and other private-sector borrowers recorded a slight monthly contraction.
However, the figures alone do not establish why private-sector credit declined or whether the movement reflects weaker demand for loans, tighter lending conditions or other factors.
Net Foreign Assets Fall by 13.57%
Another notable development was the decline in Nigeria’s net foreign assets.
The CBN data show that net foreign assets fell by 13.57 per cent to ₦30.90 trillion in September from ₦35.75 trillion in August.
On a year-on-year basis, the measure declined by 25.83 per cent from ₦41.66 trillion recorded in September 2025.
Meanwhile, net domestic assets increased by 11.97 per cent to ₦115.70 trillion from ₦103.34 trillion in August. Compared with the corresponding period in 2025, net domestic assets rose by 51.99 per cent.
The figures indicate a shift in the composition of the monetary survey towards domestic assets, even as net foreign assets declined.
CBN’s OMO Operations Provide Background
The sharp increase in CBN bills came amid the apex bank’s continued use of Open Market Operations (OMO) to manage liquidity in the financial system.
Nairametrics reported that the CBN sold approximately ₦17.51 trillion in OMO bills during September 2026, while about ₦10.89 trillion in maturing bills was repaid.
This left a net liquidity withdrawal of approximately ₦6.62 trillion during the month.
OMO operations allow the CBN to influence the amount of liquidity available in the financial system through the sale and redemption of financial instruments.
When the apex bank sells bills to investors and financial institutions, funds can be absorbed from the system for the duration of the instruments, helping to manage liquidity conditions.
The reported operations provide context for the increased importance of CBN bills in September’s monetary statistics.
What the September Figures Mean for Nigeria’s Economy
The September figures show why headline money supply growth should not be interpreted in isolation.
Although M3 increased by 5.40 per cent in one month, the sharp rise in CBN bills accounted for most of that expansion. By comparison, M2 grew by just 1.38 per cent.
The distinction matters because an increase in a monetary aggregate does not automatically translate into more cash available for spending, stronger bank lending or higher economic activity.
The eventual effects depend on several factors, including liquidity conditions, demand for money, credit availability, the speed at which money circulates and the supply of goods and services.
For the CBN, the figures underscore the importance of managing liquidity while balancing inflation control with the need to support productive economic activity.
For businesses and consumers, the data provide an indication of changing monetary conditions but do not, on their own, establish whether borrowing costs, consumer prices or access to credit will rise or fall.
Overall, September’s monetary statistics were characterised by a sharp increase in CBN bills, stronger government credit, a marginal monthly decline in private-sector credit and a contraction in net foreign assets.
Source: Central Bank of Nigeria monetary statistics, with OMO transaction figures reported by Nairametrics.
