Banks shift N3.86trn into agriculture as oil credit falls N335bn

Nigerian banks increased lending to the agriculture sector to N3.86 trillion in March 2026, even as credit to oil and gas companies fell by N335 billion in the first quarter, signalling a gradual shift in the distribution of bank financing across major sectors of the economy.

The latest Central Bank of Nigeria (CBN) data, contained in its Quarterly Statistical Bulletin, showed that agricultural credit rose from N3.71 trillion in January to N3.81 trillion in February and N3.86 trillion in March, representing a N150 billion, or about 4 per cent, increase over the three-month period.

In contrast, lending to oil and gas companies declined from N10.91 trillion in January to N10.58 trillion in March, a reduction of about N335 billion, even though the sector continued to account for one of the largest concentrations of bank credit.

The divergent movements point to a changing allocation of bank financing, with agriculture and some infrastructure-related sectors recording stronger credit growth while manufacturing and oil and gas experienced declines.

Power and energy lending increased from N1.30 trillion to N1.61 trillion during the period, while real estate credit rose sharply from N4.67 trillion to N6.29 trillion.

Manufacturing, however, saw its credit stock fall from N6.57 trillion in January to N5.77 trillion in March, a decline of N800 billion.

Total private-sector credit increased from N57.41 trillion in January to N59.74 trillion in March, indicating that overall bank financing to businesses expanded despite significant shifts between sectors.

The increase in agricultural lending is particularly significant because improved access to finance is critical to raising production and reducing the structural constraints facing Nigeria’s food and agricultural value chains.

The data also suggest that banks are increasingly extending credit beyond the traditional concentration in oil and gas, although the sector still held about N10.58 trillion in outstanding credit in March, almost three times the N3.86 trillion extended to agriculture.

The credit reallocation comes amid continued concerns over the high cost of borrowing, inflation and exchange-rate volatility, all of which have affected the appetite for lending and investment.

The CBN’s broader credit data also showed that net domestic credit rose to N111.40 trillion in February 2026, from N109.43 trillion in January, while credit to government increased to N35.77 trillion from N34.19 trillion.

The CBN data cautioned that these broader credit measures are separate from the sectoral private-sector credit figures.

The latest lending pattern suggests that while overall credit is expanding, the composition of that financing is changing, with agriculture, power and energy, and real estate attracting stronger growth in the first quarter.

For the economy, the critical question is whether the shift in credit allocation will translate into higher agricultural output, stronger domestic production and jobs, particularly as manufacturers continue to face weaker access to bank financing.

Ultimately, the increase in agricultural lending will have the greatest economic impact if banks can extend the additional financing to productive investments that raise output, improve supply chains and strengthen Nigeria’s food and non-oil economic base.