The Central Bank of Nigeria (CBN) has reported a significant increase in credit extended to the Federal Government, rising by N11.33 trillion (57.11%) to reach N31.15 trillion in August, up from N19.83 trillion in July.
This data is part of the latest Money and Credit Statistics released by the CBN, which indicates a pattern of fluctuating borrowing by all levels of government from commercial lenders over recent months.
In June, the total credit amounted to N23.93 trillion, an increase from N19.98 trillion in April, but lower than the N28.38 trillion recorded in May. The first quarter of 2024 also exhibited variable borrowing trends, with credit figures showing a peak of N33.93 trillion in February before declining to N19.59 trillion in March.
This consistent borrowing trend underscores the Federal Government's increasing dependence on CBN facilities to finance capital projects, manage debt servicing, and meet other fiscal responsibilities.
Economic analysts have voiced concerns regarding the long-term viability of such borrowing practices, suggesting that they could exacerbate economic strain and contribute to rising inflation.
In contrast, credit to the private sector experienced a decline of N777.13 billion (1.03%), falling to N74.73 trillion in August from N75.51 trillion in July.
The private sector credit had previously risen from N76.48 trillion in January to a peak of N80.86 trillion in February, but then decreased to N71.21 trillion in March before showing modest recovery to N72.92 trillion in April and settling at N73.19 trillion by June.
The total currency in circulation also saw an increase, rising from N4.05 trillion in July to N4.14 trillion in August, reflecting a growth of N91.08 billion (2.25%).
