The flow of bank credit is showing a gradual shift away from government, with net credit to the public sector falling by more than N7 trillion in two months, while lending to businesses and other private borrowers continued to rise.

Latest data from the Central Bank of Nigeria (CBN) showed that credit to the government fell from N40.03 trillion in June to N33.92 trillion in July and further to N32.70 trillion in August.

The August figure represents a decline of N7.33 trillion from the June level and extends the fall in government credit to a third consecutive month.

In contrast, credit to the private sector rose for the third consecutive month, increasing from N83.26 trillion in June to N83.43 trillion in July and N84.55 trillion in August.

The movement leaves a growing gap between the two categories of domestic credit, with private-sector credit now more than twice the level of credit to government.

However, the latest increase in private-sector lending has not restored credit to the peak recorded earlier in the year. Private-sector credit stood at N94.61 trillion in February, the highest level recorded during the period covered by the data, before declining in subsequent months.

The August figure was nevertheless N8.67 trillion, or 11.4 per cent, above the N75.88 trillion recorded in August 2025.

The CBN data did not indicate whether the decline in government credit reflected lower borrowing, debt repayments, valuation changes or other factors, making it difficult to establish the precise reason for the shift.

The broader credit position also showed a decline in net domestic credit, which fell from N123.29 trillion in June to N117.35 trillion in July and N117.25 trillion in August.

Meanwhile, other assets, net, declined from N9.93 trillion in July to N9.14 trillion in August.

The latest increase in private-sector credit followed a steady rise from N80.59 trillion in April to N81.04 trillion in May, N83.26 trillion in June and N83.43 trillion in July. The figure stood at N75.83 trillion in December 2025.

The CBN data did not provide a sector-by-sector breakdown of the August increase, meaning the industries or categories of borrowers that accounted for the latest rise in private-sector credit could not be determined.

The movement in credit allocation comes as businesses continue to depend on bank financing for working capital and investment, while lenders assess the returns and risks associated with government and private-sector assets.

Separately, broad money supply, measured by M3, rose to N139.38 trillion in August from N138.78 trillion in July, representing a monthly increase of N601.6 billion, or 0.4 per cent.

On a year-on-year basis, M3 was 16.4 per cent higher than the N119.69 trillion recorded in August 2025.

The increase was driven by a rise in net domestic assets, which grew by N925.5 billion from N101.07 trillion in July to N101.99 trillion in August, offsetting a N323.9 billion decline in net foreign assets from N37.71 trillion to N37.39 trillion.

Currency outside banks also increased in August, reversing three consecutive months of decline. It rose by N70.9 billion, or 1.48 per cent, from N4.80 trillion in July to N4.87 trillion.

Despite the rebound, cash outside banks remained below the N5.25 trillion recorded in January.

On a year-on-year basis, however, currency outside banks increased by about N419 billion, or 9.4 per cent, from N4.45 trillion in August 2025.