Private sector borrowings increase by 4% in 12 months—CBN

The total amount borrowed by private sector players increased by 4% in 12 months, according to data available in Central Bank of Nigeria’s (CBN) latest report. At the same time, the government has scaled back borrowing. The Apex Bank data said that credit to the private sector increased by 4.0% year on year to N76.14 trillion in June, up from NGN73.19 trillion in the equivalent period in 2024. Analysts at Cordros Capital Limited said they attribute the moderate growth to the diminished impact of currency depreciation on banks’ foreign-denominated assets, driven by the recent stabilisation of the naira and the CBN’s tight monetary policy stance. At the same time, credit to the government declined moderately by 0.9% year-on-year to NGN23.72 trillion compared with NGN23.93 trillion in the equivalent period in 2024.
The reduced government borrowing from domestic banks for deficit financing eased as fiscal performance improved following successes recorded with economic reforms. Overall, broad money supply (M3) rose by 15.8% year on year to N117.50 trillion, following increases across quasi and narrow money supply. Details revealed that quasi money surged by 20% in 12 months, and narrow money supply surged by 8.5% in the same period. On a month-on-month basis, the credit to private sector declined by 2.2% to NGN76.14 trillion in June from NGN77.83 trillion. Private borrowing had dropped by 0.3% in May as companies scaled back activities. “We expect CPS growth to remain subdued in the near term, constrained by the current tight monetary policy stance. However, a potential shift toward monetary easing later in the year could support a gradual recovery in CPS growth over the medium term”, analysts said.