The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has expressed concern over the inflationary pressures resulting from rising liquidity in the banking sector.

He cautioned that growing disbursements of statutory revenues through the Federation Account Allocation Committee could undermine the CBN’s disinflation efforts if not accompanied by strict monetary measures.

In his personal statement following the 300th Monetary Policy Committee meeting held on May 20, 2025—published on the CBN’s website on Saturday—Cardoso acknowledged that inflation is beginning to ease but warned that fresh risks from liquidity surges demand close monetary oversight.

“We are also confronted with increased liquidity injections into the banking system from statutory revenue distributions, highlighting the need for tight monetary conditions to avoid renewed inflationary pressures,” the CBN governor said.

According to data from the FAAC, a total of ₦1.818 trillion was distributed among the Federal, State, and Local Governments as Federation Account revenue for June 2025—a 9.6% increase from the ₦1.659 trillion shared in May.

The breakdown reveals that statutory revenue contributed ₦1.018 trillion, while Value Added Tax generated ₦631.51 billion.

Additionally, ₦29.17 billion came from the Electronic Money Transfer Levy, and ₦38.85 billion was recorded as exchange difference revenue.

An extra ₦100 billion was drawn from non-mineral revenue sources as augmentation.

Of the total disbursed, the Federal Government received ₦645.38 billion, State Governments ₦607.42 billion, and Local Government Councils ₦444.85 billion.

In addition, oil-producing states received ₦120.76 billion as 13% derivation revenue.

According to a statement from the Office of the Accountant-General of the Federation, gross revenue for June 2025 stood at ₦4.232 trillion. From this amount, ₦162.79 billion was deducted as the cost of collection, while ₦2.251 trillion was allocated for transfers, refunds, interventions, and savings.

The Central Bank’s concern arises from the pattern in which higher FAAC disbursements often result in increased liquidity—more naira chasing limited goods—which could fuel inflation, particularly in a fragile economic recovery.

Although data from the National Bureau of Statistics indicates progress in curbing headline inflation, analysts caution that continued liquidity injections may reverse those gains.

The NBS reported that headline inflation eased to 22.22% in June 2025, down from 22.97% in May.