Nigeria’s economy has been experiencing a significant increase in its money supply, with a reported 17% rise in M2 (a measure of the total money supply) in January 2025. This news, reported by Nairametrics, has raised concerns about the country’s currency and its value.

The rise in money supply can have a diluting effect on a currency’s value, as more money in circulation can lead to inflation and decrease in purchasing power. This is a cause for concern for Nigerians, as it could mean higher prices for goods and services, making it more difficult for people to afford their basic needs.

But what exactly is causing this increase in money supply? One factor could be the government’s efforts to stimulate the economy and provide relief during the ongoing pandemic. With businesses struggling and people losing their jobs, the government has been injecting money into the economy to keep it afloat. However, this has also led to an increase in the money supply, which could have long-term consequences.

Another factor could be the rise in digital currencies, such as Bitcoin, in Nigeria. As more people turn to these alternative forms of currency, it could be contributing to the increase in M2. This is a trend that is being seen globally, as digital currencies gain more mainstream acceptance.

The rise in money supply is not a new issue for Nigeria, as the country has been struggling with inflation for years. However, this recent increase has raised concerns about the stability of the currency and the overall health of the economy.

It is important for the government to closely monitor the money supply and take necessary measures to prevent further dilution of the currency’s value. This could include implementing tighter monetary policies and promoting financial literacy among citizens.

In conclusion, the increase in Nigeria’s money supply is a cause for concern and highlights the need for careful management of the economy. As the country continues to navigate through the challenges of the pandemic and the rise of digital currencies, it is crucial to find a balance between stimulating the economy and maintaining the value of the currency.