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Credit to the Nigerian government rose by 63.09% year-on-year to N39.40 trillion in September 2026, while there was a marginal monthly decline in private-sector credit.
Data from the Central Bank of Nigeria’s (CBN) Money and Credit Statistics show that credit to government increased by N15.24 trillion from N24.16 trillion in September 2025 to N39.40 trillion in September 2026, within 12 months.
The increase accelerated in September, when government credit rose by N6.36 trillion from N33.04 trillion in August, representing a monthly growth of 19.26%.
What the data is saying
A closer glance at the data shows that Net domestic credit, which captures credit to government and the private sector alongside other relevant components, increased by 4.96% month-on-month to N123.34 trillion from N117.51 trillion.
In contrast, credit to the private sector declined by 0.64% to N83.93 trillion from N84.47 trillion in August, although it remained 15.7% higher than the corresponding period of 2025. This created a divergence in the monthly movement of credit to the two sectors.
The figures suggest that while liquidity in the financial system continues to expand, a growing share of available credit is being directed toward financing government activities at a time when businesses are facing elevated borrowing costs and tighter financial conditions.
Government credit rebounds after three-month decline
The September increase marks a reversal of the recent downward movement in credit to government.
According to previously published CBN data, credit to government declined for three consecutive months, falling from N36.98 trillion in June to N33.99 trillion in July and N33.04 trillion in August 2026.
- The August figure represented a decline of approximately N7.33 trillion from June, before the sharp September rebound.
- The September increase of N6.36 trillion therefore represents a significant monthly reversal, although credit to government remained below its June level of N40.03 trillion.
The latest movement underscores the volatility in the government’s net credit position during 2026.
On a year-on-year basis, the increase is more pronounced. Government credit rose by N15.24 trillion from N24.16 trillion in September 2025 to N39.40 trillion in September 2026.
The distinction matters because the CBN’s credit-to-government measure should not automatically be interpreted as the total amount of new debt raised by the Federal Government during the month.
Government credit emerges as biggest driver of credit growth
The increase in credit to government contributed significantly to the expansion in net domestic credit over the past year.
- Net domestic credit rose from approximately N96.69 trillion in September 2025 to N123.34 trillion in September 2026, representing an increase of N26.65 trillion or 27.56%.
- Over the same period, credit to government increased by N15.24 trillion, while credit to the private sector rose by approximately N11.41 trillion.
- Based on these changes, the increase in credit to government accounted for approximately 57.2% of the annual expansion in net domestic credit, while the increase in private-sector credit accounted for about 42.8%.
This indicates that government credit represented the larger contribution to the annual increase in domestic credit, although private-sector credit also recorded substantial growth over the period.
- Notably, Broad money supply, measured by M3, rose to N146.60 trillion in September 2026 from N117.78 trillion in September 2025, representing annual growth of 24.47%.
The movement in broad money supply reflects changes across several components of the monetary survey, including domestic and foreign assets, other balance sheet items and CBN bills held by money-holding sectors.
Private-sector credit declines in September
In contrast to the sharp monthly increase in government credit, private-sector credit declined by 0.64% to N83.93 trillion in September from N84.47 trillion in August.
- The decline represents a reduction of approximately N537.61 billion within one month.
- However, the annual trend remains positive as credit to the private sector increased by 15.73% from N72.53 trillion in September 2025, representing an increase of approximately N11.41 trillion over the 12-month period.
The movement is worth monitoring because access to financing remains important for businesses seeking to expand production, purchase inventory, invest in equipment, and meet working-capital requirements.
What the figures mean for monetary conditions
The September data offers fresh insight into the structure of credit creation in Nigeria’s economy.
While overall money supply and domestic credit continue to grow, the composition of that growth is becoming increasingly important.
The sharp rise in government borrowing, combined with a moderation in private-sector lending and a decline in net foreign assets, suggests that public-sector financing needs are playing a larger role in shaping monetary conditions.
For policymakers, the challenge will be ensuring that liquidity growth supports productive economic activity rather than simply financing fiscal deficits. For businesses, the key concern remains access to affordable credit in an environment where government demand for financing continues to expand.
As Nigeria pursues fiscal consolidation and economic growth objectives, the balance between government borrowing and private-sector credit will remain a critical indicator of the economy’s long-term investment and growth prospects.
