FG Reduces Local Borrowing as Credit to Government Drops to 12-Month Low of N23.55trn 

Nume Ekeghe

After months of elevated borrowing, credit to the federal government fell to N23.55 trillion in April 2025, the lowest level seen in a year, according to new data published by the Central Bank of Nigeria (CBN). 

The figure represents a sharp 8.9 percent drop from N25.86 trillion in March and may signal a deliberate shift by the government to scale back on domestic borrowing.

The drop is noteworthy given the borrowing patterns observed over the past year. In April 2024, government credit stood at N19.98 trillion. From there, it rose steadily hitting N28.38 trillion in May and maintaining an upward trajectory through to November, when it peaked at N39.62 trillion. This period coincided with fiscal pressures, sluggish revenue inflows, and heightened deficit financing needs.

June 2024 saw a dip to N23.93 trillion, followed by a drop to N19.83 trillion in July. But the respite was short-lived. Borrowing surged again in August to N31.15 trillion, and hovered near record levels for three consecutive months: N39.47 trillion in September, N39.39 trillion in October, and then the November peak.

Credit to government eased slightly in December to N27.14 trillion, and again to N25.03 trillion in January 2025. It rose to N27.11 trillion in February before beginning a sustained decline in March and April.

Meanwhile, credit to the private sector climbed to a new high of N77.91 trillion in April, an encouraging signal for the real economy. The figure represents a 2.2 percent increase from N76.27 trillion recorded in March, and a year-on-year rise of almost 7 per cent compared to N72.92 trillion in April 2024.

The credit expansion is backed by steady bank lending activity across industries, particularly in manufacturing, trade, agriculture, and telecommunications. The private sector has remained a bright spot in monetary data, despite the Central Bank’s tighter policy stance aimed at curbing inflation and defending the naira.

Private credit volumes had hovered between N73 trillion and N75 trillion for most of mid-2024, before accelerating toward year-end. By December, credit had reached N78.02 trillion the highest point before a brief slowdown in January and February.

The April rebound suggests growing confidence among lenders and borrowers, likely supported by improved balance sheets and a more stable policy environment.