Private sector borrowing grew by 4% year-on-year to N76.14 trillion in June 2025, up from N73.19 trillion in the same period of 2024, according to the Central Bank of Nigeria’s (CBN) latest report.
The increase in credit to the private sector was attributed to the stabilisation of the naira and the apex bank’s tight monetary policy stance, which reduced the impact of currency depreciation on banks’ foreign-denominated assets, analysts at Cordros Capital Limited said.
In contrast, government borrowing declined by 0.9% year-on-year to N23.72 trillion in June, compared to N23.93 trillion in the corresponding period of 2024. Analysts linked the decline to improved fiscal performance supported by ongoing economic reforms, which reduced the need for domestic deficit financing.
Meanwhile, broad money supply (M3) expanded by 15.8% year-on-year to N117.50 trillion, driven by increases in both quasi and narrow money. Quasi money rose by 20% in the 12-month period, while narrow money advanced by 8.5%.
On a monthly basis, private sector credit fell by 2.2% in June to N76.14 trillion from N77.83 trillion in May, extending a 0.3% decline recorded in the previous month as firms scaled back borrowing.
“We expect CPS growth to remain subdued in the near term due to the CBN’s tight monetary policy stance. However, a possible shift toward monetary easing later in the year could support a gradual recovery in credit expansion over the medium term,” Cordros Capital analysts noted.
