Credit to Nigeria’s private sector fell to N75.8 trillion in August 2025 from N76.12 trillion in June 2025.
This is according to the latest data from the Central Bank of Nigeria (CBN).
According to the CBN, this marks the fifth time this year that lending to businesses and individuals has declined.
According to the data, the credit to private sector peaked in April 2025, recording N78.1 trillion.
This trend of declining credit began in February 2025 when total private sector credit fell from N77.3 trillion in January to N76.3 trillion.
The downward movement continued in March, slipping further to N75.9 trillion. Although April witnessed a temporary rebound to N78.1 trillion, the gains were short-lived as credit declined again in May and June.
In contrast, the year-on-year data shows an increase from N74.7 trillion in August 2024 to N75.8 trillion in August 2025.
However, the repeated monthly declines in 2025 raise concerns over potential liquidity constraints, reduced lending appetite by banks, or waning credit demand from the private sector amid tight economic conditions.
CBN did not release data for July 2025.
Sectoral breakdown of credit allocations
While the CBN did not release the detailed sectoral credit breakdown for August 2025, earlier figures suggest that the bulk of credit allocation continues to flow into the manufacturing, general commerce, and oil and gas sectors.
In the apex bank’s Economic Report for January 2025, CBN stated, “In terms of sectoral distribution, the services sector maintained the largest share at 54.87 per cent, followed by the industry sector at 40.02 per cent, while the agriculture sector accounted for 5.11 per cent. Notably, the share of the agriculture sector was higher than the 4.82 per cent recorded a month earlier.”
The decline in credit to the private sector coincides with the CBN’s hawkish monetary stance and its stringent attempt to curb inflation and stabilise the naira.
Dr. Paul Alaje, Chief Economist and CEO of SPM Professionals, stated the need for CBN to reduce policy rate “so that it’s easier for investors to put money in businesses and we can see an expansion in our economy.”
Also, according to Kitan Aloba, analyst at Ren Money, the benchmark MPR rate, currently at 27%, has made “borrowing more expensive, thus affecting the private sector’s appetite for credit.”
What you should know
At its 302nd meeting in Abuja, the CBN reduced the MPR by 50 basis points, bringing it down from 27.5% to 27%.
In addition, the MPC adjusted the asymmetric corridor around the benchmark rate to +250/-250 basis points, compared to the previous +500/-100 basis points.
The Committee retained the Cash Reserve Ratio (CRR) for commercial banks at 45 per cent, while that of merchant banks was set at 16 per cent.
Slower growth in private sector credit could weigh on investment, job creation, and overall GDP growth, especially in a country where the private sector accounts for a large share of economic activity.
While the federal government has introduced some intervention schemes, including the Nigerian Consumer Credit Corporation, their impact appears limited in the face of broader monetary tightening.
