Banks lend N15.66 trillion to government in one year – CBN

Banks in Nigeria increased their lending to the federal government significantly over the past year, according to data from the Central Bank of Nigeria.

The figures show that credit given to the government rose from N23.93 trillion in April 2025 to N39.60 trillion in April 2026.

This represents an increase of N15.66 trillion, which is a very large jump of about 65.44% within just one year.

During the same period, the total amount of credit in the economy also increased, rising from N102.00 trillion to N120.18 trillion.

However, most of this growth did not go to private businesses or households.

Instead, the government accounted for the largest share of the increase in borrowing from the banking system. Out of the total N18.18 trillion rise in domestic credit, about N15.66 trillion went to the government, while only N2.52 trillion went to the private sector. This means roughly 86% of new credit created in the period was directed toward government borrowing.

This trend suggests that banks are increasingly preferring to lend to the government rather than to private companies.

At the same time, lending to the private sector has remained relatively weak and uneven. Private sector credit rose only slightly from N78.07 trillion to N80.59 trillion over the one-year period, which is a very small increase compared to government borrowing.

In fact, there were also signs of decline in private sector credit in some months, showing that businesses may be facing tighter access to bank loans.

In contrast, government borrowing continued to grow steadily. By April 2026, credit to the government had also increased when compared with earlier months in the year, showing a consistent upward trend.

This growing reliance on bank financing by the government has also increased its share of total domestic credit in the banking system. Government credit accounted for 32.95% of total domestic credit in April 2026, up from 23.46% in April 2025, which shows a significant shift in lending patterns.

The broader financial environment also showed some changes during this period. Nigeria’s total money supply increased to N124.99 trillion in April 2026, supported mainly by growth in domestic assets.

The Central Bank of Nigeria also reduced the Monetary Policy Rate slightly to 26.5%, in an attempt to manage inflation and stimulate economic activity.

However, despite this policy change, lending patterns still showed a stronger preference for government securities and borrowing compared to private sector loans.

Overall, the data reflects a financial system where banks are increasingly channeling credit toward government needs, while private sector borrowing remains limited.

This situation may have wider implications for economic growth, as reduced access to credit for businesses can slow down investment, expansion, and job creation in the long run.