CBN data shows FG borrowing surged by N17.4tn in one year
By Aboki Forex —
Fresh data from the Central Bank of Nigeria shows that credit to the Federal Government jumped sharply in the 12 months to May 2026. The figure hit N40.38tn, up from N22.99tn in May 2025. That is a year-on-year increase of N17.39tn, or 75.6 percent.
The CBN released the numbers in its latest monetary and credit statistics on Wednesday. On a month-on-month basis, government borrowing also rose. It expanded by N779.70bn in May from N39.60tn in April 2026.
Banks are putting more money into government securities. Commercial and merchant lenders are favouring low-risk instruments like Federal Government bonds and treasury bills. This is happening even as the central bank maintains tight monetary policy.
The shift suggests fiscal authorities are relying more on domestic debt issuance. They are moving away from direct CBN financing to fund their operations.
Private sector credit grew much more slowly. Lending to businesses and households rose to N81.04tn in May from N80.59tn in April. That is a modest monthly increase. It shows lenders are cautious and not expanding credit to the real economy quickly.
Still, private sector credit remains larger in absolute terms. It is about two times the level of public sector credit for May.
Analysts say the data points to a persistent tilt toward public sector borrowing. The government needs to fund its fiscal deficit. But economists warn that if banks keep prioritising high-yield government debt, it could crowd out private industries. Without affordable credit, local businesses and manufacturers may struggle to grow.
The CBN has not released a detailed breakdown of private credit allocation for the period.