Demand deposits in Nigeria have soared by 206.83% from N9.67 trillion in May 2019 to N29.67 trillion in May 2024, according to data from the Central Bank of Nigeria’s website.

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The data showed that demand deposits grew by 9.31% between May 2019 and May 2020, reaching N10.57 trillion despite global economic uncertainties caused by the COVID-19 pandemic. This growth trend continued, surpassing N20 trillion in early 2023.

Several factors contributed to this increase, including heightened economic activities, government stimulus measures, and enhanced liquidity in the banking system.

Shedrach Israel, an economist at Lotus Beta Analytics, told our correspondent on Friday that the surge in demand deposits indicates robust consumer confidence and liquidity in Nigeria’s financial system. “It reflects heightened economic activities, investments, and savings mobilisation within the country, supporting lending activities and stimulating economic growth,” he added.

However, the rising trend in demand deposits necessitates vigilant monitoring by monetary policymakers to ensure financial stability, manage inflationary pressures, and sustain long-term economic growth. Experts noted that while the growth in demand deposits reflects a resilient financial sector, it also requires careful management to mitigate potential risks and ensure sustainable economic development.

Olorunfemi Idris, an analyst at Phemmy Gracey Limited, highlighted that the increase in demand deposits has significant implications for the economy, providing banks with more funds to lend and potentially boosting credit availability and economic growth. However, he also cautioned about the potential for inflation and economic instability if the surge in money supply is not managed properly.