Oil inflows push Nigeria's money supply to N129 trillion as firms shun borrowing
By Aboki Forex —
Nigeria's money supply jumped sharply in May 2026. Strong foreign currency inflows drove the rise. But businesses stayed cautious and avoided taking new loans.
Data from the Central Bank of Nigeria shows broad money supply, known as M3, rose by 3.38 percent month-on-month to N129.21 trillion in May. That is up from N124.99 trillion in April. Money supply M2 also climbed 3.38 percent to N129.20 trillion.
The main driver was a 12.23 percent increase in Net Foreign Assets, which hit N26.95 trillion. The Financial Markets Dealers Association said this points to stronger earnings from external sources. Higher crude oil exports during the US-Iran conflict helped. Other autonomous foreign exchange inflows also boosted the figure.
Net Domestic Assets rose 1.28 percent to N102.26 trillion. That added to overall liquidity in the financial system.
But lending to the private sector barely moved. It went up by just 0.57 percent to N81.04 trillion. This suggests businesses are still reluctant to borrow. The Central Bank cut interest rates in late February 2026 to encourage lending. But the expected boost did not happen.
The FMDA analysis shows that factors beyond interest rates are holding back borrowing. Global uncertainties remain a big concern. The US-Iran conflict disrupted key shipping routes. That pushed up freight costs and raised production expenses for manufacturers. Rising input costs, supply chain problems and doubts about future demand continue to weigh on business decisions.