Credit to Nigeria’s private sector rose by ₦1.13 trillion to ₦84.55 trillion in August 2026. The Central Bank of Nigeria (CBN) released the data. The figure increased 1.35% from ₦83.43 trillion in July. It was 11.42% higher than the ₦75.88 trillion recorded in August 2025. However, it remained below the ₦94.61 trillion recorded in February 2026. Credit to government fell by ₦1.22 trillion, or 3.60%, to ₦32.70 trillion in August from ₦33.92 trillion in July.
The CBN tracks credit to private and government sectors. Private sector credit supports business investment. Government credit reflects borrowing to fund deficits. In recent years, government borrowing crowded out private lending. Banks preferred risk-free government securities. High interest rates made lending to businesses risky. The current data suggests a shift. Government borrowing is falling. Private credit is rising. That is a positive signal. But private credit remains below its February peak. The decline from February to August is significant. It suggests businesses are still cautious. High interest rates and inflation limit borrowing. The CBN’s monetary policy has been tight. It has kept rates high to fight inflation. That has made credit expensive.
Total net domestic credit declined marginally to ₦117.25 trillion from ₦117.35 trillion. Money supply increased. M3 rose to ₦139.38 trillion from ₦138.78 trillion. M2 grew to ₦139.37 trillion from ₦138.77 trillion. The money supply growth indicates liquidity in the system. The decline in government credit frees up room for private lending. Banks have more capacity to lend to businesses. But they must be willing to take risk. The CBN’s policies affect that willingness. High cash reserve ratios and high interest rates discourage lending. The data is a snapshot. It shows improvement. It does not show a trend. One month does not make a recovery. Private credit needs sustained growth. The government must reduce its borrowing further. The CBN must create an environment where banks lend. Otherwise, the February peak will remain the high-water mark.
Winners: Private sector borrowers, if credit access improves. Banks, if they lend profitably. The CBN, which sees its policies working. Losers: Government, if it faces higher borrowing costs. Consumers, if money supply growth fuels inflation. Businesses, if credit remains expensive. The economy, if lending stays below potential.
Bottom Line: Private credit rose in August. Government credit fell. That is the right direction. But private credit is still below February levels. One month is not a trend. The CBN must sustain the shift. Banks must lend. Businesses must borrow. The economy needs credit to grow.