CBN Faces Pushback From Buhari’s Aide Over N35 Trillion Currency Printing Statement

CBN Faces Pushback From Buhari’s Aide Over N35 Trillion Currency Printing Statement

An aide to former President Muhammadu Buhari has challenged claims made by Central Bank of Nigeria (CBN) Governor Yemi Cardoso, who attributed the nation’s current economic challenges to mismanagement during Buhari’s two terms from 2015 to 2023. The aide stated that the total amount of money supplied by the CBN during that period was N7.5 trillion, significantly less than the N35 trillion cited by Cardoso…….CONTINUE READING 

Recent CBN data revealed that Nigeria’s total money supply rose by 14.22% to N107.1 trillion between January and August 2024, up from N93.77 trillion in January 2024. During a recent media briefing, Cardoso indicated that the money supply increased from about N19 trillion in 2015 to N54 trillion in 2023, attributing the increase to the issuance of money via “Ways and Means,” a process through which the CBN lends to the government.

Cardoso argued that the printing of N35 trillion flooded the economy with excessive naira, leading to inflation due to too much money chasing too few goods. In response, Buhari’s aide, who requested anonymity, claimed these figures were inaccurate, asserting that the total “Ways and Means” advances amounted to N7.5 trillion throughout Buhari’s presidency.

The aide noted, “The real position of things is that from the beginning, when the then-acting Governor of the CBN was in office, that issue arose. The CBN was called by the National Assembly; their figures for Buhari were not more than N7.5 trillion for all eight years.”

Supporting his argument, the aide referenced a letter purportedly from the CBN in response to a Senate inquiry regarding “Ways and Means.” Dated January 16, 2023, the letter included financial data and detailed advances between 2015 and 2022.

Buhari’s administration faced numerous fiscal challenges, including declining oil prices and reduced revenues. To manage deficits, the government increasingly turned to the CBN for financing, which led to a substantial increase in the money supply that both Cardoso and Finance Minister Wale Edun have linked to rising inflation and a depreciating currency.

Attempts to elicit responses from CBN and presidential officials regarding the aide’s claims have not yielded results as of the report’s filing.

**Money Supply Trends**
Meanwhile, the CBN’s latest figures show that Nigeria’s total money supply rose by 14.22% to N107.1 trillion from January to August 2024, marking a 0.75% increase from July’s N106.3 trillion and a 5.6% rise from June’s N101.4 trillion. This represents a year-on-year increase of 65% from N64.8 trillion recorded in August 2023.

The money supply encompasses all currency and liquid assets in the economy, including cash in circulation and easily convertible bank deposits. The M2 money supply, which includes currency outside banks, demand deposits, and quasi-money, indicates growing liquidity within the Nigerian economy.

This surge in liquidity continues to pose challenges for the CBN’s Monetary Policy Committee, which must balance economic growth with inflation control. A detailed breakdown shows that currency outside banks reached N3.8 trillion, demand deposits hit N31 trillion, and quasi-money rose to N72.2 trillion in August 2024.

At the last MPC meeting, Cardoso linked the high money supply to the country’s inflation rate. Verification of CBN data revealed that the money supply increased from N18.9 trillion in January 2015 to N20.03 trillion by December 2015. By January 2023, the total was N52.83 trillion, rising to N78.83 trillion by December 2023.

While increased liquidity can stimulate short-term growth by facilitating credit access for businesses, it also risks fuelling inflation if production fails to keep pace with the demand for goods and services.