Banks’ Credit to Government Rises ₦15.7trn in One Year – CBN

Nigerian banks increased their lending to the Federal Government by ₦15.66 trillion in one year, according to the Central Bank of Nigeria’s (CBN) money and credit statistics.

Credit to government rose from ₦23.93 trillion in April 2025 to ₦39.60 trillion in April 2026, representing a 65.44% year-on-year increase. This accounted for most of the expansion in domestic credit.

Overall, net domestic credit grew from ₦102 trillion to ₦120.18 trillion, but government borrowing contributed 86% of the increase, while private sector credit rose only ₦2.52 trillion.

The CBN noted that private sector lending fell sharply from ₦94.61 trillion in February 2026 to ₦80.59 trillion in April, a decline of ₦14.02 trillion (14.82%).

Government credit also expanded by ₦5.38 trillion between December 2025 and April 2026, raising its share of net domestic credit from 23.46% to 32.95%.

At its 304th Monetary Policy Committee meeting in February 2026, the CBN cut the Monetary Policy Rate (MPR) by 50 basis points to 26.5%, while retaining the Cash Reserve Ratio (CRR) at 45% for commercial banks and 16% for merchant banks.

Despite weaker private sector lending, Nigeria’s broad money supply (M3) rose to ₦124.99 trillion in April 2026, driven by growth in net domestic assets, which climbed to ₦100.97 trillion.

Analysts warn that banks’ increasing preference for lending to government rather than businesses reflects structural weaknesses in Nigeria’s credit system, limiting financing for manufacturing, agriculture, and SMEs, sectors critical for growth and job creation.