Nigerian banks are reshaping their credit portfolios as lenders increasingly tilt toward agriculture and other emerging sectors, according to data compiled by the Central Bank of Nigeria (CBN). In March 2026, lending to the agricultural sector rose to N3.86 trillion, a sharp signal of how credit allocation is changing amid macroeconomic headwinds including elevated interest rates, inflation pressures and continued exchange-rate volatility.
The shift is captured in the CBN’s latest Quarterly Statistical Bulletin, which shows a steady climb in agricultural lending across the first quarter of the year. Credit to agriculture increased from N3.71 trillion in January to N3.81 trillion in February, before rising further to N3.86 trillion in March. The upward movement indicates that banks are not only expanding exposure to farming-related value chains, but doing so consistently across months rather than through isolated adjustments.
In contrast, exposure to the oil and gas sector—which has historically accounted for a large share of bank credit in Nigeria—declined during the same period. The CBN figures cited by THISDAYLIVE show that banks reduced their lending to oil and gas by about N335 billion in the first three months of 2026. The contraction occurred as oil and gas credit fell from N10.91 trillion in January to N10.71 trillion in February and then to N10.58 trillion in March, reflecting a clear retrenchment in the sector’s share of bank lending. THISDAYLIVE
Economically, the banking sector’s recalibration appears closely linked to the risk and return calculus imposed by current conditions. With interest rates remaining high, banks face an environment where the ability of borrowers to service debt can become more constrained, especially in sectors exposed to price swings and foreign-exchange pressures. Persistent exchange-rate volatility, in particular, can complicate financing for import-dependent inputs and can alter the effective cost of projects measured in local currency.
Against this backdrop, agriculture has emerged as a relative focal point for lenders. The rise in agricultural lending suggests that banks are seeking exposure where returns may be supported by real-economy activity and tangible production cycles. While farming can be exposed to its own risks—including weather variability and supply-chain constraints—credit decisions may be influenced by structured financing, improved value-chain arrangements, and the availability of alternative collateral and off-take mechanisms compared to more complex upstream and downstream oil-and-gas arrangements.
CBN data also implies that banks are spreading credit across a wider set of priorities. Beyond agriculture, the report context indicates a broader reorientation toward “other emerging areas of the economy,” suggesting the shift is not strictly limited to farms but extends to sectors considered more bankable under current market conditions. Still, agriculture stands out in the figures because the sector’s lending growth is both consistent and sizable across the three-month window.
The aggregate direction of credit is particularly notable: agricultural lending is rising at the same time oil and gas exposure is falling. That simultaneous movement underscores a substitution effect inside bank balance sheets—funds and risk appetite are being reallocated from one dominant sector to others perceived to offer comparatively better alignment with current borrower capacity and banking risk tolerances. THISDAYLIVE
Policy debates have increasingly emphasized agriculture as a lever for employment, food security and economic diversification. In Osun State, for example, political actors have repeatedly framed farming as a development pathway. An APC governorship candidate, Bola Oyebamiji, has pledged an agriculture-driven approach that includes encouraging mechanised farming across agrarian communities and improving rural infrastructure to connect producers to markets. The campaign message also highlights the intention to boost productivity through easier farming processes and improved logistics—factors that can materially affect how banks evaluate repayment prospects for farmers and agribusinesses. Vanguard
While election manifestos do not directly determine bank lending, the growing emphasis on mechanisation and market access can support the fundamentals that underpin credit expansion. Banks typically look for credible project execution, dependable revenue streams, and clearer pathways from production to sales. If infrastructure improvements reduce post-harvest losses and improve market reach, agricultural cash flows can become more predictable—an outcome that can strengthen both smallholder financing models and lending to commercial aggregators.
Yet the banking shift should also be read in the context of broader uncertainty. During periods of macroeconomic stress, banks frequently tighten underwriting standards and rebalance sector exposures. The first quarter numbers suggest that lenders are doing so while still maintaining overall lending activity, choosing which sectors to expand rather than simply withdrawing from credit. That pattern may explain why agriculture grows even as oil and gas lending contracts.
Analysts may interpret the N335 billion reduction in oil and gas exposure as a response to sector-specific stressors, including the challenges that can arise from fluctuating energy revenues and exchange-rate effects on costs and financing structures. At the same time, agricultural lending reaching N3.86 trillion indicates that banks see sufficient demand and perceived viability within farming-related segments.
As Nigeria continues navigating elevated inflation and currency instability, the direction of bank credit is likely to remain a key economic barometer. The CBN’s quarterly breakdown shows that portfolio decisions can change quickly within a single quarter, offering insight into how financial institutions are managing risk. For borrowers, the implication is clear: sectors aligned with real-economy production and improved market structures may find it easier to attract funding, while traditionally dominant sectors may face tighter credit lines until conditions improve. THISDAYLIVE
Whether this reallocation will translate into sustained growth in agricultural output and broader diversification will depend on continued financing flows, effective risk management by banks, and supportive policy measures that help agricultural businesses scale. For now, the figures point to a decisive recalibration: agriculture rising to N3.86 trillion in March 2026 while oil and gas exposure declines by roughly N335 billion across January to March, reshaping the credit landscape of Nigeria’s economy.
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