Nigerian banks increase government credit by N15.66 trillion in one year, private sector lending lags

Banks’ credit to the Nigerian government rose by N15.66 trillion in one year, as lenders continued to increase exposure to public sector borrowing despite weaker growth in credit to the private sector.

Data from the Central Bank of Nigeria’s money and credit statistics showed that credit to government increased from N23.93 trillion in April 2025 to N39.60 trillion in April 2026. That represents a 65.44% year-on-year rise. Government borrowing from the banking system accounted for most of the annual expansion in domestic credit.

What the data shows

Net domestic credit rose from N102.00 trillion in April 2025 to N120.18 trillion in April 2026, an increase of N18.18 trillion or 17.83%. Out of this, credit to government alone contributed N15.66 trillion. Credit to the private sector rose by only N2.52 trillion, from N78.07 trillion to N80.59 trillion. This means about 86% of the annual increase in domestic credit came from government borrowing.

The CBN did not publish March 2026 figures, making a direct month-on-month analysis impossible. However, compared with February 2026, when the Monetary Policy Committee cut the benchmark interest rate, credit to government rose slightly from N39.36 trillion to N39.60 trillion in April. That represents an increase of N239.92 billion, or 0.61%. In contrast, credit to the private sector fell sharply from N94.61 trillion in February to N80.59 trillion in April, a decline of N14.02 trillion or 14.82%.

Public sector share rises in 2026

Compared with December 2025, credit to government rose by N5.38 trillion, from N34.22 trillion to N39.60 trillion in April 2026. This represents a 15.71% increase within the first four months of the year. Government credit also took a larger share of net domestic credit, rising from 23.46% in April 2025 to 32.95% in April 2026. This suggests that banks are increasingly allocating credit to government, while private sector lending remains under pressure.

What you should know

The Central Bank of Nigeria reduced the Monetary Policy Rate by 50 basis points to 26.5% from 27%. The decision was taken at the 304th meeting of the Monetary Policy Committee held in Abuja. While there was a decline in currency in circulation, Nigeria’s broad money supply increased to N124.99 trillion in April 2026, from N123.12 trillion recorded in February 2026. That represents an increase of nearly N1.87 trillion within the two-month period. This increase was largely driven by net domestic assets, which rose significantly to N100.97 trillion from N97.55 trillion within the same period.

Nigerian banks’ credit to the private sector declined to N75.24 trillion in January 2026, down from N75.83 trillion recorded in December 2025. A year-on-year comparison shows that lending remains below the peak levels recorded in 2025, demonstrating continued volatility in credit conditions and a cautious lending environment at the start of the year.