Amid mounting macroeconomic uncertainty, Nigerians are leaning heavily towards savings and low-risk financial instruments, with recent data from the Central Bank of Nigeria (CBN) showing a marked increase in quasi-money holdings.

Quasi-money are assets that are easily and quickly convertible into cash. They are considered to be close substitutes for cash in the economy.

According to the CBN’s Money and Credit Statistics for March 2025, quasi-money, comprising savings deposits, fixed-term deposits and other liquid but non-transactional assets, rose to N75.65 trillion, representing a 3.65 per cent month-on-month (m/m) increase and a 26.42 per cent rise year-on-year, up from N59.84 trillion in March 2024.

The surge highlights a growing preference for capital preservation, as households and businesses seek refuge in interest-bearing instruments amid Nigeria’s ongoing economic slowdown.

“The rising volume of quasi money reflects both a cautious approach to spending and increasing trust in formal financial institutions,” said a senior analyst at Vetiva Capital. “It’s a defensive strategy by savers who are navigating inflationary pressures and volatile market conditions.”

The CBN has maintained a tight monetary policy for over a year, with high interest rates designed to tame inflation. This stance has made fixed-income securities, such as treasury bills and term deposits, especially attractive to investors.

In January 2025, the CBN’s auction for 364-day treasury bills saw an oversubscription of N1.47 trillion, with stop rates reaching 22.6 per cent. By mid-February, total subscriptions across tenors remained strong at N2.41 trillion, underlining sustained demand for secure, high-yield instruments.

The data also reveals that broad money supply (M2) grew to N114.20 trillion in March 2025, a 23.69 per cent increase year-on-year, with quasi money continuing to dominate M2 composition. Meanwhile, demand deposits rose to N33.96 trillion, up 17.65 per cent from the same period last year, while currency outside banks jumped 26.72 per cent to N4.59 trillion.

The central bank also reported mixed trends in domestic credit: Net domestic credit rose 12.47 per cent year-on-year to N103.37 trillion, though it dipped 1.20 per cent month-on-month.

Credit to the government grew 31.99 per cent to N25.86 trillion year-on-year but fell 4.63 per cent in March, suggesting a brief pause in government borrowing whilst private sector credit growth remained modest at 7.10 per cent pointing to conservative lending practices and subdued appetite for new debt in the real economy.

Analysts say the quasi-money uptick reflects a broader trend of financial system deepening, driven by digitization and formal banking efforts. The rise in savings could, over time, translate into stronger capital pools for lending, once macroeconomic stability returns.

While the flight to safety is a rational response to uncertainty, experts warn that over-reliance on fixed-income assets could limit economic dynamism in the long term.

However, for now, Nigeria’s financial landscape suggests that stability, not speculation, is the dominant mood among savers and investors.

The Nigerian Insurance Reform Bill, currently waiting for the president’s assent, will enhance consumer protection by creating a compensation fund for victims of liquidated insurance companies.

Kunle Ahmed, chairman of the Nigerian Insurers Association (NIA), who made the disclosure during a quarterly press conference in Lagos Tuesday, said the bill will also set up fund for uninsured road accident victims.

Ahmed said the bill is a significant piece of legislation aimed at overhauling the regulatory framework of the insurance sector in Nigeria.

“The Insurance Reform Bill includes provisions designed to protect policyholders adequately. A fund has been set aside to meet requests of policyholders whose primary insurance company is liquidated or faces challenges, addressing recent occurrences in the industry.”

Additionally, a fund is included in the bill for uninsured road accident victims, Ahmed said.

According to him, these sections of the bill are expected to enhance trust in the insurance industry.

“The bill also reflects increased capital requirements, which we believe will lead to stronger and more virile insurance companies that can develop new products and address the pain points of consumers.”

On the ongoing tax reform bill at the National Assembly, he said that the NIA has made a representation to the government regarding the taxation of insurance premiums, emphasising that some premium belongs to shareholders.

“Changes to any tax bill could impact various sectors of the economy, including insurance. We have made a representation to the government regarding the taxation of insurance premiums, emphasising that some premium belongs to shareholders, especially on the life insurance side, and this concern is being taken seriously.”

On the enforcement of third party motor insurance in Nigeria, Ahmed commended the inspector general of police and the commissioner for insurance for their commitment to protect Nigerians on the road.

“For us at NIA, the enforcement of the third-party policy is largely to the benefit of policyholders.

“Policyholders are entitled to compensation for their liabilities in terms of injury or death to third parties, which is unlimited.”

According to him, member companies of the NIA have seen slight growth in third-party policies since the pronouncement, but noting the figures are not handy.

While emphasising the importance of claims payment in the industry, he said the hallmark of any licensed insurance company is the timely payment of claims.

“Insurance companies are ready and willing to pay valid claims. The enforcement of the third-party policy is a welcome development for the economy, for the insurance companies, and for policyholders.”

“We expect to see a situation whereby motorists do not get out of their cars and fight when accidents occur.

“Despite the amount paid in claims, we believe there is more to achieve in terms of the ease and timeliness of claims payments.”

Ahmed said the industry is working to harmonise claims process to limit the number of documents required for claims to be paid.

According to him, the industry has grown significantly, noting that while non-life business has seen notable growth, largely driven by fire and oil and gas policy, the life business has also experienced growth, driven by group life policy.

“The growth we have seen is likely to be sustained, and we will have a very vibrant and growing insurance market in Nigeria.

“Apart from the big numbers around gross written premium (GWP), I also think we have grown our net assets as an industry.”

Sage Grey Finance Limited, a leading financial institution committed to creating impact through lending, investments, fund management, and strategic advisory services, has reaffirmed its commitment to responsible and sustainable business practices, becomes a participatory member of the United Nations (UN) Global Compact initiative — a voluntary leadership platform for the development, implementation, and disclosure of responsible business practices.

With this announcement, Sage Grey Finance aligns with over 20,000 companies across 160+ countries committed to promoting sustainability and advancing the UN Sustainable Development Goals (SDGs). As a participant, the company will integrate the UN Global Compact’s Ten Principles — spanning human rights, labour, environment, and anti-corruption — into its strategy, culture, and daily operations, and will report annually on progress through a Communication on Progress (CoP).

The UN Global Compact is a call to companies everywhere to align their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption, and to act in support of Sustainable Development Goals (SDGs).

Speaking on the company’s commitment to sustainable and responsible business practices, Temitope Runsewe, CEO of Sage Grey Finance Limited, said: “At Sage Grey Finance, we see sustainability as fundamental to long-term economic growth and societal progress. Joining the UN Global Compact is a clear statement of our commitment to responsible finance — one that balances profitability with purpose.

“We are building a future-focused institution that embeds ethical standards, environmental consciousness, and inclusive impact into every decision we make. With a focus on sustainable financial innovation, Sage Grey Finance aims to lead by example within Nigeria’s financial ecosystem and the broader African market.

“As we scale our work across Africa, we remain dedicated to advancing solutions that not only serve our clients but also strengthen communities and contribute to global development goals.”

Prior to becoming a member of the United Nations Global Compact, Sage Grey Finance had already adopted policies aligned with the Compact’s sustainability-aligned policies and principles. Notably, the company’s Impact Finance Framework ensures that its investment and operational decisions drive measurable environmental, social, and financial outcomes.

The company has also developed a comprehensive CSR Strategy aligned with the SDGs, targeting areas such as access to finance, education, health, and gender inclusion through partnerships with NGOs, government agencies and community organisations. These efforts include partnerships with educational institutions and NGOs, such as collaborations with the University of Lagos and government agencies like the Lagos State Waste Management Authority (LAWMA).

In addition, the company recently partnered with the Bank of Industry to provide accessible and affordable financing options to Micro, Small, and Medium Enterprises (MSMEs). The partnership supports the Federal Government of Nigeria’s MSMEs Fund and is designed to foster business growth, job creation, and economic development by offering tailored financing solutions to MSMEs across Nigeria.

With a strong presence in Nigeria and a growing portfolio of impact-driven financial solutions, Sage Grey Finance continues to drive positive change by empowering entrepreneurs, supporting youth development, and fostering inclusive economic growth.