Credit to the government surged by over N11 trillion in the month of August 2024, as high interest rates make government securities more attractive to investors.
Declining private sector debtWhile the government is increasingly tapping into credit markets, the private sector appears to be retreating.
Credit to the private sector in August 2024 stood at N74.73 trillion, a slight decrease from N75.
51 trillion in July 2024.
In August 2023, private sector credit was significantly lower at N56.
95 trillion, highlighting that while there has been an overall increase in private sector borrowing over the past year, the rising cost of debt is starting to weigh on businesses’ willingness to expand credit further.
Rising interest rates have made government securities more attractive to investors, as higher yields offer better returns with relatively lower risk compared to private sector lending.
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