Financial institutions’ total loans to the government rose by 29.86 percent, or N7.87 trillion, to N34.22 trillion in December 2025 from N26.35 trillion in the preceding month, latest data released by the Central Bank of Nigeria (CBN) shows.

According to the updated “Money and Credit statistics,” posted on the apex bank’s website, at N34.22 trillion in December 2025, net credit to the government increased by 26.09 per cent, or N7.08 trillion, when compared with the N27.14 trillion recorded for December 2024.

Further analysis of the data indicates that credit to the private sector rose by 1.61 per cent, or N1.20 trillion, to N75.83 trillion in December 2025 from N74.63 trillion in the previous month. However, according to the data, Year-On-Year (YoY) credit to the private sector dropped by 2.80 per cent, or N2.19 trillion, from the N78.02 trillion recorded for December 2024.

Experts note that net credit to the government and credit to the private sector have maintained an upward trend in recent months, even though, after it reduced the Monetary Policy Rate (MPR) the country’s benchmark interest rate by 50 basis points to 27.00 per cent at its September meeting, the CBN’s Monetary Policy Committee (MPC) left the rate un- changed at its last meeting of 2025 in November.

For instance, in a recent report, analysts at FBN Quest Research said: “At its November meeting, the MPC reinforced its anti-inflation stance by maintaining policy rates at c.27%, despite seven consecutive months of disinflation.

The committee acknowledged progress in curbing inflation but emphasised that current double digit headline inflation remains elevated. “Consequently, it adopted a cautious stance on policy easing to avoid eroding the gains from previous tightening measures and to sustain the ongoing disinflationary trajectory.

To stimulate credit expansion to the real sector, the MPC eased financial conditions by adjusting the asymmetric corridor around the MPR. The corridor was widened to +50/-450bps from +250/-250bps. “The adjustment of the upper limit (Standing Deposit Facility) is significant, as it lowered the cost of accessing liquidity from the CBN, incentivising borrowing from the CBN, which could translate into increased lending to the private sector.

“By reducing the lower bound (Standing Deposit Facility) substantially, the committee aims to encourage banks to deploy liquidity toward productive eco- nomic activities rather than parking idle funds with the CBN.” They, however, noted that despite the reduction of the SDF rate to c.22.5% from c.24.5%, “banks continued to channel excess liquidity to the CBN, given its still attractive risk-free return relative to lending to the private sector.”