Onome Amuge
Nigeria’s currency in circulation rose 7.3 percent from November 2024 to N5.235 trillion in January 2025. It was also up 43.6 percent from the corresponding period of January 2024. However, the credit offered by the financial system decreased during the period under review, as both public and private sectors saw a decline in lending, according to data released by the Central Bank of Nigeria (CBN).
The CBN data revealed that the total currency in circulation surged in January 2025, reaching N5.235 trillion, compared to N4.878 trillion in November 2024 and a relatively lower N3.65 trillion in January 2024.
The CBN also revealed an increase in currency outside banks, which increased to N4.74 trillion in January 2025, marking a 1.9 percent surge from November 2024 and a 44.5 percent rise when compared to the January 2024 figure of N3.28 trillion.
According to the CBN’s money and credit statistics, cash remains the dominant form of payment in Nigeria’s economy, with 90.4 percent or N4.74 trillion of the total currency in circulation being held outside the banking system.
Meanwhile, the financial system’s total credit provided to the economy in January 2025 remained almost unchanged compared to January 2024, but the total credit available in January 2025 declined 14 percent from the November 2024 levels.
The CBN data showed a decline in the total credit provided by the financial sector from N115.576 trillion in November 2024 to N99.405 trillion in January 2025. The contraction was attributed to a reduction in financial sector credit to the government, which experienced a 38.1 percent dip from N39.61 trillion in November 2024 to N24.51 trillion in January 2025.
Financial sector credit to the private sector also recorded a decline, albeit at a more gradual rate than that seen in government lending.
The CBN data revealed that financial system credit extended to the private sector stood at N74.88 trillion in January 2025, representing a marginal decrease from N75.96 trillion recorded in November 2024 and N76.47 trillion in January 2024.
