Banks in Nigeria collect a lot of money from people who keep their savings in bank accounts. But instead of using this money to give loans to businesses that want to grow, many banks prefer to use the money to buy government bonds. Government bonds are like IOUs that the… pic.twitter.com/SQQhD05AuW
— BusinessDayNG (@BusinessDayNg) December 1, 2025
Banks in Nigeria collect a lot of money from people who keep their savings in bank accounts. But instead of using this money to give loans to businesses that want to grow, many banks prefer to use the money to buy government bonds. Government bonds are like IOUs that the government promises to pay back with interest.
Banks choose government bonds because they are safer and give easy profits. Lending to small businesses can be risky because some businesses may not be able to pay back their loans. So banks feel more comfortable giving money to the government instead of helping businesses expand.
This creates a problem for the country. When businesses cannot get loans, they struggle to grow, create jobs, or improve their services. This slows down the economy because fewer companies can invest in new ideas, hire more people, or build new products.