Banks cut oil, gas lending by ₦335bn

By Firdaus Jibril

Nigerian banks have reduced their exposure to the oil and gas sector by approximately ₦335 billion in the first quarter of 2026, while lending to the agriculture sector increased by about ₦150 billion, according to data from the Central Bank of Nigeria (CBN).

The CBN’s latest Quarterly Statistical Bulletin revealed that credit extended to the oil and gas sector fell from ₦10.91 trillion in January to ₦10.71 trillion in February, before dropping further to ₦10.58 trillion in March.

This represents an overall decline of about ₦335 billion between January and March.

In contrast, lending to agriculture increased steadily during the same period, rising from ₦3.71 trillion in January to ₦3.81 trillion in February and ₦3.86 trillion in March.

The increase amounted to approximately ₦150 billion, representing a growth of roughly 4% over the quarter.

The data also showed shifts in credit allocation across other sectors. Lending to the power and energy sector rose from ₦1.30 trillion in January to ₦1.61 trillion in March, while credit to real estate expanded from ₦4.67 trillion to ₦6.29 trillion. Conversely, lending to manufacturing declined from ₦6.57 trillion in January to ₦5.77 trillion in March.

Overall private-sector credit rose from ₦57.41 trillion in January to ₦59.74 trillion in March, indicating that total lending expanded alongside a redistribution of credit across major economic sectors.

Despite the reduction, the oil and gas sector remained one of the largest beneficiaries of bank credit, with its March exposure standing at ₦10.58 trillion.

The CBN figures also highlighted increased credit flow to agriculture, power, energy, and real estate sectors vital to domestic production, infrastructure development, and broader economic activity.

This portfolio rebalancing occurred against a backdrop of elevated borrowing costs, inflationary pressures, and exchange-rate volatility, all of which continue to shape the lending decisions of financial institutions.