June 24 (THEWILL) — Data from the Central Bank of Nigeria shows that credit to the Federal Government rose sharply over the 12 months to May 2026, underscoring continued public sector borrowing amid tight monetary conditions.
Total credit to government climbed to ₦40.38 trillion in May 2026, compared with ₦22.99 trillion in the corresponding period of 2025.
This represents an increase of ₦17.39 trillion year-on-year, equivalent to a 75.6 percent rise in lending exposure to the public sector.
On a monthly basis, credit expanded by ₦779.70 billion, rising from ₦39.60 trillion in April 2026 to the latest figure.
Banking sector data indicate that lenders continued to allocate significant liquidity to government securities, including bonds and other instruments used to finance fiscal operations.
In contrast, private sector credit grew modestly to ₦81.04 trillion from ₦80.59 trillion in April, reflecting slower expansion in lending to businesses and households.
Despite the gap, private credit remains more than twice government credit, at about 2.01 times the public sector level in May 2026.
Analysts say the trend highlights sustained government borrowing appetite and a comparatively cautious pace of credit expansion to the real economy in Nigeria.
The steady rise in public sector credit also reflects increased issuance of government securities as fiscal authorities seek alternative funding sources beyond direct central bank financing.
Month-on-month movements suggest that government borrowing momentum remains stronger than private sector demand for new credit facilities.
However, economists caution that a persistent tilt toward public sector credit could crowd out lending to productive industries over time.
The Central Bank of Nigeria has not released a detailed sectoral breakdown of private credit allocation for the period under review.
Overall, the data point to continued expansion in financial system exposure to government obligations relative to the private economy.
This pattern underscores fiscal pressures and banking sector reallocation dynamics.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
