Credit to the Federal Government surged by 75.6 per cent year-on-year, rising from N22.99 trillion in May 2025 to N40.38 trillion in May 2026, according to the latest data released by the Central Bank of Nigeria (CBN).
The figures show that government borrowing increased by N17.39 trillion over the one-year period. On a month-on-month basis, credit to the Federal Government also climbed by N779.7 billion, from N39.60 trillion in April 2026 to N40.38 trillion in May 2026.
The CBN data indicates that commercial and merchant banks continued to channel significant investments into Treasury Bills and Federal Government bonds, underscoring the government's increasing reliance on the domestic debt market to fund its fiscal operations.
Meanwhile, lending to the private sector recorded only marginal growth during the period. Private sector credit rose from N80.59 trillion in April to N81.04 trillion in May 2026. Although the pace of growth remained modest, total private sector credit was still approximately twice the size of government borrowing.
Economic analysts have cautioned that the banking sector's growing appetite for government securities could crowd out private sector borrowing by reducing access to affordable credit for businesses. They warn that such a trend could weaken private investment, constrain business expansion, and slow overall economic growth.
The Central Bank has yet to publish a sectoral breakdown of private sector lending for the period.
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