Nume Ekeghe
Credit to the private sector rose for the third consecutive month in August, climbing to N84.55 trillion, as lending to government fell for the third straight month to N32.70 trillion, highlighting a widening shift in the direction of domestic credit.
This is according to the Central Bank of Nigeria (CBN) latest money and credit statistics, which showed that private-sector credit increased by N1.13 trillion, or 1.35 per cent, from N83.43 trillion in July.
The August increase followed a N171.8 billion rise in July, when private-sector credit moved up from N83.26 trillion in June.
Overall, private-sector credit has gained N3.51 trillion, or 4.33 per cent, since May, when it stood at N81.04 trillion.
The recovery comes after a sharp contraction earlier in the year. Private-sector credit rose to N94.61 trillion in February, its highest level in the period, before falling to N80.59 trillion in April.
From that April low, credit has recovered by almost N4 trillion, although it remains about N10.06 trillion below the February peak.
The year-on-year picture is stronger. Private-sector credit was N75.88 trillion in August 2025, meaning the latest figure represents an increase of N8.67 trillion, or 11.43 per cent, over the year. Government credit, however, has been moving in the opposite direction. It fell by N1.22 trillion, or 3.60 per cent, from N33.92 trillion in July to N32.70 trillion in August. That extended the decline which began in June. Government credit stood at N40.38 trillion in May, fell to N40.03 trillion in June, N33.92 trillion in July and N32.70 trillion in August.
The result is a N7.68 trillion, or 19.02 per cent, decline in three months. Despite the recent fall, government credit remained well above its level a year earlier. The August figure was N9.75 trillion, or 42.47 per cent, higher than the N22.95 trillion recorded in August 2025.
The divergent trends have widened the gap between private-sector and government credit to N51.85 trillion in August, from N40.66 trillion in May.
Meanwhile, the CBN data showed that currency in circulation rebounded modestly in August after falling in the previous two months.
Currency in circulation rose to N5.44 trillion, from N5.38 trillion in July, an increase of N53.6 billion, or one per cent.
The increase, the CBN said, followed declines from N5.69 trillion in May to N5.52 trillion in June and N5.38 trillion in July.
Despite the August rebound, currency in circulation remained N294.8 billion, or 5.1 per cent, below the N5.73 trillion recorded in January.
Year-on-year, however, it was up N514 billion, or 10.44 per cent, from N4.92 trillion in August 2025.
Currency outside banks also increased, rising N70.9 billion, or 1.48 per cent, to N4.87 trillion in August from N4.80 trillion in July.
The figure remained below the N5.19 trillion recorded in May and N5.25 trillion in January, but was N424 billion, or 9.53 per cent, higher than the N4.45 trillion recorded a year earlier.
The August data therefore shows a clear divergence: private-sector credit has added N3.51 trillion in three months, while government credit has shed N7.68 trillion, even as cash in circulation and currency outside banks posted modest monthly recoveries after their recent declines.