CBN Data Shows Credit to Government Declined by 38.1% to N24.5trn

• The Central Bank of Nigeria's latest data has revealed that government credit by commercial banks has declined on month-month
• On a year-on-year basis, credit to the government increased by 4.3%, rising from N23.52 trillion in January 2024
• Most loans are collected from banks by the government through bonds and other debt instruments

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Central Bank of Nigeria has credit to the Nigerian government dropped to N24.52 trillion in January 2025.

This is a 38.1% reduction from the N39.62 trillion reported in November 2024.

Despite this monthly drop, year-on-year figures indicate a modest increase of 4.3% from N23.52 trillion in January 2024.

The latest decline according to market watchers, follows months of fluctuating government credit levels. In October 2024, credit to the government stood at N39.39 trillion, slightly lower than the N39.47 trillion recorded in September.

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This relative stability in borrowing suggested a steady financing approach in the latter part of 2024.

However, in August, government credit dropped to N31.15 trillion, marking a significant decline from the N33.93 trillion recorded in February 2024.

July 2024 recorded one of the lowest credit levels at N19.83 trillion, before witnessing an increase in August as government borrowing picked up again.

In June, credit stood at N23.93 trillion, reflecting a moderate rise compared to the N19.97 trillion in April., BusinessDay reports.

March had also recorded a low of N19.59 trillion before climbing to N33.93 trillion in February, making it one of the highest levels of credit to the government within the year.

Despite the sharp decline in January, the annual increase in credit to the government indicates that borrowing remains a critical tool for fiscal management.

The rise from N23.52 trillion in January 2024 to N24.52 trillion in January 2025 suggests that while short-term contractions may occur, the overall trajectory of government borrowing is still upward.

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ThisDay reports that market observers anticipate further fluctuations in government credit levels in the coming months as the government continues to navigate economic pressures.

Financial analysts said:

“Rising global interest rates, exchange rate volatility, and revenue collection challenges could influence borrowing decisions. As policymakers seek to balance expenditure demands with available resources, the interplay between monetary policy, fiscal discipline, and credit allocation will remain a focal point for economic stakeholders."

Banks interest rates for loans

Legit.ng earlier reported that the Central Bank of Nigeria disclosed the maximum and minimum lending rates across various banks including Zenith, Access, UBA, and other top commercial financial institutions.

The lending rate refers to the interest banks impose on loans extended to customers in need of funds.

Prime lending rates apply to a bank's most creditworthy and secure clients, typically for short-term loans.

The publication, released on the CBN website, is part of the apex bank's commitment to transparency and full disclosure.

Source: Legit.ng