Credit to government rises 2% to N19.98trn

Nigeria’s government borrowing increased slightly in April, to N19.98 trillion, despite analysts’ predictions of a continued decline. This rise comes after a period of significant fluctuation, with government credit reaching a high of N33.92 trillion in February before dropping in March.

Central Bank policy changes may be playing a role in these ups and downs. The bank raised interest rates several times in 2024 to combat inflation. Analysts suggest this could discourage borrowing, explaining the March dip. However, the April rise suggests other factors might be at play.

Looking ahead, analysts expect credit growth to slow for both the government and private sector. Businesses may seek alternative funding options due to rising borrowing costs. The government is also likely to explore various funding avenues to meet its spending needs.

Source: Vanguard