May 26 (THEWILL) — Nigeria’s private sector credit declined sharply by more than ₦14 trillion within two months, highlighting growing weaknesses in lending to productive sectors of the economy despite the Central Bank of Nigeria’s earlier monetary policy easing.
Latest data released by the Central Bank of Nigeria showed that private sector credit dropped to ₦80.59 trillion in April 2026 from a 12-month high of ₦94.61 trillion recorded in February 2026.
The apex bank, however, did not publish credit data for March 2026, creating a gap in the reporting cycle. The figures suggest that credit conditions remain tight across the economy even as the banking system continues to witness elevated liquidity levels.
On a year-on-year basis, private sector credit remained above the ₦78.07 trillion recorded in April 2025, indicating that overall lending activity is still stronger than levels seen a year earlier. The data also showed that net domestic credit declined significantly to ₦120.18 trillion in April from ₦133.97 trillion in February, reflecting weaker credit expansion across the financial system.
Similarly, other assets (net) dropped sharply to ₦11.88 trillion from ₦20.75 trillion over the same period, suggesting adjustments in banks’ asset allocation strategies.
Despite weaker lending activity, net domestic assets rose to ₦100.97 trillion in April from ₦97.55 trillion in February, while broad money supply (M3) increased to ₦124.99 trillion from ₦123.12 trillion, indicating that liquidity conditions remained relatively strong.
The decline in private sector credit comes months after the CBN reduced the Monetary Policy Rate by 50 basis points to 26.5 percent at its February 2026 Monetary Policy Committee meeting.
Analysts say the modest rate cut has done little to stimulate lending as banks continue to favour high-yield government securities over private-sector loans amid inflationary pressures, exchange rate uncertainty, and elevated credit risks facing manufacturers, agriculture businesses, and small enterprises.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
