Credit extended by Nigerian banks to the Federal Government increased by N15.66 trillion over the past year, significantly outpacing growth in lending to the private sector, according to the latest money and credit statistics released by the Central Bank of Nigeria.
The data showed that credit to government rose from N23.93 trillion in April 2025 to N39.60 trillion in April 2026. This represents a year-on-year increase of 65.44 per cent.
The sharp rise in government borrowing accounted for the bulk of the expansion in domestic credit during the period under review.
According to the CBN, net domestic credit increased from N102.00 trillion in April 2025 to N120.18 trillion in April 2026, reflecting a growth of N18.18 trillion or 17.83 per cent.
Of the total increase, government borrowing contributed N15.66 trillion, while credit to the private sector rose by only N2.52 trillion, from N78.07 trillion to N80.59 trillion.
This means that approximately 86 per cent of the annual growth in domestic credit was driven by lending to the government.
The apex bank did not publish money and credit statistics for March 2026, making a direct month-on-month comparison unavailable.
However, available data showed that credit to government increased slightly from N39.36 trillion in February 2026 to N39.60 trillion in April 2026. The increase of N239.92 billion represents a 0.61 per cent rise over the period.
In contrast, private sector credit recorded a significant decline. Lending to businesses and households fell from N94.61 trillion in February to N80.59 trillion in April, representing a decrease of N14.02 trillion or 14.82 per cent.
A comparison with December 2025 also showed continued growth in government borrowing. Credit to government rose from N34.22 trillion in December to N39.60 trillion in April 2026, reflecting an increase of N5.38 trillion or 15.71 per cent within four months.
The data further revealed that government credit accounted for a larger share of total domestic credit. Its share rose from 23.46 per cent in April 2025 to 32.95 per cent in April 2026.
The trend suggests that banks are increasingly directing funds toward government securities and public sector borrowing, while lending to the private sector remains under pressure.
Meanwhile, the Central Bank of Nigeria reduced the Monetary Policy Rate by 50 basis points to 26.5 per cent from 27 per cent during the 304th meeting of the Monetary Policy Committee held in Abuja.
Despite a decline in currency circulating outside the banking system, broad money supply, measured by M3, increased to N124.99 trillion in April 2026 from N123.12 trillion in February 2026.
The increase of nearly N1.87 trillion was largely driven by growth in net domestic assets, which rose from N97.55 trillion to N100.97 trillion during the same period.
The report also highlighted continued volatility in private sector lending. Bank credit to the private sector stood at N75.24 trillion in January 2026, lower than the N75.83 trillion recorded in December 2025.
A year-on-year assessment indicates that lending activity remains below the peak levels recorded in 2025, reflecting cautious risk appetite among lenders and persistent challenges in the credit environment.
Analysts say the growing concentration of bank lending to government could have implications for private sector investment and economic growth if businesses continue to face limited access to affordable credit.
The latest figures underscore the increasing role of government borrowing in shaping domestic credit conditions, even as policymakers seek to stimulate private sector activity and support economic expansion.
