Credit to the Nigerian government fell for the third consecutive month, dropping to N32.70 trillion in August 2026 from N33.92 trillion in July, latest Central Bank of Nigeria (CBN) data show.
The latest decline extends a downward trend that began in June, when government credit stood at N40.03 trillion.
Between June and August, government credit therefore fell by about N7.33 trillion.
Despite the decline, the August figure remained significantly above the N22.95 trillion recorded in August 2025.
The CBN data do not specify whether the recent reduction resulted from lower government borrowing, debt repayments, valuation changes or other factors.
Private-sector credit rises
While government credit declined, lending to the private sector increased for the third consecutive month.
Private-sector credit rose to N84.55 trillion in August, from N83.43 trillion in July and N83.26 trillion in June.
However, the August figure remained below the N94.61 trillion recorded in February 2026, the highest figure among the monthly data reported.
The shift has prompted discussion about whether declining government credit could create more room for banks to lend to businesses.
Financial economist Akeen Yusuf said a sustained decline in government credit could support a rebalancing of bank lending towards the private sector, particularly if demand for business loans strengthens.
Economist Olu Olajemgbesi similarly noted that attractive yields on government securities can make banks less willing to take on the higher risks associated with private-sector lending.
Net domestic credit falls
The broader credit position also weakened during the month.
Net domestic credit fell to N117.25 trillion in August, from N117.35 trillion in July and N123.29 trillion in June.
Other assets, net, also declined from N9.93 trillion in July to N9.14 trillion in August.
The latest figures point to a reduction in government credit exposure alongside a modest increase in private-sector lending, although the data alone do not establish whether the shift represents a sustained change in banks’ lending preferences.
