As of November 2024, Nigeria’s currency in circulation has surged to a record N4.8trillion, marking a seven per cent rise from October.

In the same month, currency outside banks reached an all-time high of N4.6 trillion, up from N4.2 trillion in October, according to the latest data from the Central Bank of Nigeria (CBN).

The rise in currency circulation comes as Nigerians continue to face cash shortages, with banks limiting daily withdrawals at Automated Teller Machines (ATMs) to N20,000 per account holder.

Speaking with Daily Trust, an economist, Dr. Paul Alaje attributed the increased money supply to inflation, stating, “Money supply is expanding but this may not necessarily be in cash. As it is expanding, it will necessarily induce inflation.

“But you can’t blame the people. People must look for money. How much was bottled water last year, how much is it today?

“All of this will induce inflation. If you now ask, what is the cause of inflation? Is it money supply itself or a devaluation policy?

It is a devaluation policy. Money supply is an offshoot.”

He added, “So the Central Bank is raising interest rates to actually reduce money supply but the more they try, the more money supply expands.”

Dr. Alaje further criticised the CBN’s floatation policy, saying, “It is like chasing one’s tail and I don’t know if you are going to catch it.”

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