Credit to the Nigerian government rose to N39.40 trillion in September 2026, even as lending to the private sector declined, highlighting a widening divergence in credit flows within the economy.
Latest data from the Central Bank of Nigeria (CBN) showed that net credit to the government increased by N6.36 trillion, or 19.26 per cent, from N33.04 trillion in August 2026.
The apex bank’s updated Money and Credit Statistics, published on its website on Wednesday, also revealed that government credit rose by N15.24 trillion, representing a 63.09 per cent increase from N24.16 trillion recorded in September 2025.
In contrast, credit to the private sector declined by N537.61 billion, or 0.64 per cent, to N83.93 trillion in September from N84.74 trillion in August.
Despite the month-on-month contraction, private sector credit remained higher on a year-on-year basis, rising by N11.41 trillion, or 15.73 per cent, from N72.53 trillion recorded in September 2025.
The latest figures also showed that net credit to the government, which had maintained a downward trend between June and August 2026, reversed course in September.
Analysts have warned that increased government borrowing from the financial system could crowd out private businesses seeking funds for investment and expansion, while potentially adding to inflationary pressures.
The development comes against the backdrop of the CBN’s recent adjustment to its monetary policy framework. At its meeting last month, the Monetary Policy Committee reduced the Monetary Policy Rate (MPR) by 350 basis points, from 26.50 per cent to 23 per cent.
The committee also recalibrated the Standing Facilities corridor around the MPR to +50 and -300 basis points. However, the CBN maintained that the rate reduction did not signal an abandonment of its tight monetary policy stance.
Meanwhile, the apex bank’s data showed a further increase in cash outside the banking system despite the prevailing monetary policy measures.
Currency outside banks rose by 0.99 per cent to N4.92 trillion in September from N4.87 trillion in August, while currency in circulation increased by 1.50 per cent to N5.52 trillion from N5.44 trillion over the same period.
The figures point to continued growth in government credit alongside a monthly decline in private sector lending, even as cash holdings outside banks and total currency in circulation increased.
