By Ayo Kehinde
Nigerian banks increased their lending to the Federal Government by ₦15.66 trillion over the past year, highlighting a growing preference for public-sector exposure amid weaker credit growth to businesses and households.
According to the Central Bank of Nigeria’s (CBN), latest money and credit statistics, government credit rose from ₦23.93 trillion in April 2025 to ₦39.60 trillion in April 2026, representing a 65.44 percent year-on-year increase.
The sharp rise made government borrowing the dominant driver of domestic credit growth during the period. Net domestic credit expanded from ₦102.00 trillion to ₦120.18 trillion, an increase of ₦18.18 trillion or 17.83 percent. Of this amount, government borrowing accounted for ₦15.66 trillion, while credit to the private sector increased by just ₦2.52 trillion, from ₦78.07 trillion to ₦80.59 trillion.
This indicates that approximately 86 percent of the annual increase in domestic credit came from lending to the government.
Although the CBN did not publish March 2026 figures, data showed that government credit rose marginally by ₦239.92 billion, or 0.61 percent, between February and April 2026, from ₦39.36 trillion to ₦39.60 trillion.
In contrast, credit to the private sector declined sharply from ₦94.61 trillion in February to ₦80.59 trillion in April, a drop of ₦14.02 trillion or 14.82 percent.
The government’s share of net domestic credit also increased significantly, rising from 23.46 percent in April 2025 to 32.95 percent in April 2026, underscoring banks’ growing allocation of funds to public-sector borrowers.
The trend comes despite the CBN’s decision to reduce the Monetary Policy Rate by 50 basis points to 26.5 percent at the 304th Monetary Policy Committee meeting. Meanwhile, broad money supply (M3) rose to ₦124.99 trillion in April 2026, driven largely by growth in net domestic assets, signalling continued liquidity expansion within the financial system.
