Nigerian Banks Shift Credit Flow: Agriculture Rises to N3.86tn as Oil and Gas Exposure Declines

Nigerian banks are increasingly channeling credit into agriculture and other burgeoning economic sectors, with lending to agriculture hitting N3.86 trillion by March 2026. This marks a significant shift as exposure to the oil and gas sector declined by about N335 billion in the first three months of the year.

The Central Bank of Nigeria's latest Quarterly Statistical Bulletin reveals this changing lending pattern. Credit to agriculture saw a steady rise, increasing from N3.71 trillion in January to N3.86 trillion in March, a gain of roughly N150 billion or four percent in the quarter. This contrasts sharply with the oil and gas sector, where bank credit fell from N10.91 trillion in January to N10.58 trillion in March.

While oil and gas remains a major recipient of bank credit, lenders are gradually increasing their focus on other productive areas like agriculture, power, and real estate. This shift is particularly crucial for agriculture, a sector historically hampered by insufficient financing, high costs, insecurity, and poor infrastructure. Enhanced access to bank credit could provide vital funds for farmers and other stakeholders along the agricultural value chain, especially as Nigeria grapples with high food prices.

However, the first quarter also highlighted disparities in credit allocation. Manufacturing, another key sector, experienced a significant drop in lending, falling from N6.57 trillion in January to N5.77 trillion in March, indicating financing pressures for manufacturers. Conversely, the power and energy sector saw credit grow from N1.30 trillion to N1.61 trillion, and real estate experienced a surge from N4.67 trillion to N6.29 trillion. Overall private-sector credit expanded from N57.41 trillion to N59.74 trillion, showing a substantial reallocation among sectors.