Credit to Nigeria’s private sector rose to N77.9 trillion in April 2025, up from N76.2 trillion in March, according to the latest data from the Central Bank of Nigeria (CBN).
The April figure also exceeds the N77.38 trillion recorded in January and N76.26 trillion in February, indicating a steady upward trend in private sector lending.
In simple terms, credit to private sector by banks refers to financial resources provided to the private sector by other depository corporations (deposit taking corporations except central banks), such as through loans, purchases of nonequity securities, and trade credits and other accounts receivable, that establish a claim for repayment.
Although the CBN did not publish the detailed sectoral breakdown for April, earlier data indicate that the bulk of credit continues to flow into the manufacturing, general commerce, and oil and gas sectors.
In its latest February 2025 Economic Report, the apex bank noted that the services sector accounted for the largest share of credit at 52.10%, followed by the industrial sector at 42.9%, while agriculture received 5.41%.
Public sector credit declines
In contrast to the increase in private sector credit, lending to the public sector saw a significant decline.
Credit to the public sector dropped to N23.6 trillion in April from N25.9 trillion in March, reflecting a reduction in government borrowing or repayments during the period.
CBN’s commitment to rebuilding institutional credibility
CBN Governor Olayemi Cardoso has recently stressed that rebuilding institutional credibility remains a top priority for the apex bank. Recent steps taken, such as the publication of audited financial statements and net reserve figures, are part of a broader effort to restore confidence in the central bank’s role as a custodian of monetary stability.
- He noted that the CBN is not a commercial bank and should not be assessed by conventional profitability metrics.
- However, the move from a loss position of over N1 trillion in 2023 to about N30 billion in 2024 demonstrates the extent of reforms and fiscal consolidation achieved within the institution over the last 18 months.
- Despite global uncertainties and structural economic challenges, the CBN believes that Nigeria is on a steady recovery path. The combination of tighter monetary policy, exchange rate reforms, improved reserve management, and stronger collaboration with fiscal authorities is expected to deepen macroeconomic stability and support medium-term growth.
What this means
The rise in private sector credit signals increased economic activity and growing business confidence. It suggests that firms are more willing to borrow and invest, potentially leading to job creation, higher productivity, and overall economic expansion.
- Analysts highlight that interest rate policy remains a critical factor influencing lending and investment decisions.
- At its 300th Monetary Policy Committee (MPC) meeting held on May 19–20, 2025, the CBN maintained the Monetary Policy Rate (MPR) at 27.5%, while monitoring inflation trends and exchange rate volatility.
- The Cash Reserve Ratio (CRR) was retained at 50% for Deposit Money Banks and 16% for Merchant Banks. The Liquidity Ratio was also held steady at 30%.
According to the latest Fitch assessment on Nigeria, non-performing loans stood at 4.9% and are expected to rise further due to high inflation and elevated interest rates. Though banking assets are relatively insulated, Fitch expects M&A activity to accelerate among smaller banks struggling to meet new capital thresholds.
