The Central Bank of Nigeria (CBN) has reported a significant decline in credit extended to the government, which fell to N24.52 trillion in January 2025.
According to the latest data from the CBN’s Money and Credit Statistics, this represents a substantial decline from the N39.62 trillion recorded in November 2024 and N39.4 trillion in October 2024.
The data further shows that September 2024 recorded N39.7 trillion while August 2024 stood at N31.2 trillion.
The downward trend in government credit is reflective of ongoing fiscal measures aimed at curbing excess borrowing and maintaining economic stability.
A comparison with previous months shows significant volatility in government credit, with July 2024 recording N19.8 trillion and June 2024 standing at N23.9 trillion.
On a year-on-year basis, credit to the government in January 2025 (N24.52 trillion) is slightly higher than the N23.52 trillion recorded in January 2024, indicating a modest increase in government borrowing over the past year. However, the fluctuations observed throughout 2024 suggest that borrowing patterns have been influenced by economic reforms and central bank interventions.
Economic analysts suggest that the sharp drop in credit to the government could be attributed to:
The CBN recorded total subscriptions of N2.41 trillion, lower than the N3.22 trillion from the previous auction.
“If you look at our budget presentation, which is currently going through the National Assembly, one thing you will notice is there is some deficit spending,” he explained.
However, he stressed that any funding required to cover the deficit will not be managed through the “printing of money,” a practice that contributed to economic instability in the past. Instead, the government intends to raise funds by accessing financial markets on “reasonable terms.”
With the government emphasizing fiscal prudence and debt sustainability, credit to the government may continue to fluctuate based on revenue performance and economic policies. Analysts predict that if revenue streams remain strong, reliance on credit could decrease further, ensuring macroeconomic stability.