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Credit to Nigeria’s private sector declined sharply by more than ₦14 trillion within two months, falling to ₦80.59 trillion in April 2026 from a peak of ₦94.61 trillion in February, despite the Central Bank of Nigeria easing monetary policy earlier in the year.
Latest data released by the apex bank revealed the significant contraction in lending activity, although figures for March were not published, leaving a gap in the reporting cycle.
Despite the decline, private sector credit remained above the ₦78.07 trillion recorded in April 2025, suggesting that lending levels are still higher than they were a year earlier.
The data also showed that net domestic credit declined to ₦120.18 trillion in April from ₦133.97 trillion in February, while other assets (net) fell considerably to ₦11.88 trillion from ₦20.75 trillion over the same period, reflecting broader adjustments across banking sector balance sheets.
However, net domestic assets rose to ₦100.97 trillion in April from ₦97.55 trillion in February, indicating that liquidity conditions within the financial system remained relatively strong even as credit extension weakened.
The contraction has renewed concerns about access to financing for key productive sectors of the economy, particularly manufacturing, agriculture, and small and medium-sized enterprises (SMEs), which rely heavily on bank credit to support operations and expansion.
At its 304th Monetary Policy Committee (MPC) meeting in February 2026, the CBN reduced the Monetary Policy Rate (MPR) by 50 basis points to 26.5 per cent in a move aimed at easing borrowing conditions and supporting economic activity.
However, the apex bank retained other key monetary parameters, including the Cash Reserve Ratio (CRR) at 45 per cent for commercial banks and 16 per cent for merchant banks, while the Liquidity Ratio remained unchanged at 30 per cent.
Analysts say the modest rate cut may have had limited impact due to prevailing macroeconomic uncertainties, elevated borrowing costs, exchange rate volatility, and banks’ continued preference for investing in government securities rather than extending credit to businesses.
The Centre for the Promotion of Private Enterprise has also raised concerns about persistent structural weaknesses in Nigeria’s credit system, warning that financing constraints continue to limit growth in productive sectors critical to economic diversification.
Meanwhile, Nigeria’s broad money supply (M3) increased to ₦124.99 trillion in April 2026 from ₦123.12 trillion in February, highlighting concerns that available liquidity within the financial system is not translating effectively into productive lending and real sector growth.
The development underscores the growing challenge of ensuring that monetary easing measures translate into improved access to credit, particularly for businesses expected to drive investment, job creation, and economic expansion.
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