Nigeria Government Borrowing Jumps 75.6% to N40.38 Trillion as Banks Keep Credit Tight

3 articles · Updated · msmeafricaonline.com · Jun 25

CBN data showed credit to Nigeria’s federal government hit N40.38 trillion in May 2026, up 75.6% from N22.99 trillion a year earlier and N779.7 billion higher than in April.
N81.04 trillion in private-sector credit grew far more slowly, signaling banks are still favoring Treasury bills and bonds over loans to businesses and households.
N121.42 trillion in net domestic credit points to broader liquidity pressure, with economists warning heavy government borrowing could keep inflation, interest rates and Naira weakness under strain.
26.50% monetary policy rate means borrowing costs remain steep for MSMEs, limiting expansion, equipment purchases and job creation even as demand for financing persists.
Analysts say easing the squeeze will require stronger government revenue, tighter spending control and more bank lending to productive sectors such as agriculture, manufacturing and small businesses.

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