The Central Bank of Nigeria (CBN) has ruled out a return to large-scale intervention lending programmes, citing a backlog of ₦4.69 trillion in unpaid loans as a major concern for the country’s monetary stability.
CBN Governor Olayemi Cardoso disclosed that the outstanding loans represent about 43 per cent of all intervention funds disbursed since 2010, highlighting significant challenges in the apex bank’s previous development finance model.
Cardoso said the huge volume of unpaid loans has placed considerable strain on the CBN’s balance sheet, prompting a strategic shift away from subsidised lending schemes that dominated policy direction over the past decade.
He warned that continued reliance on such interventions had created “moral hazard” within the economy, where borrowers take excessive risks with the expectation that losses would be absorbed by the government or the central bank.
According to the governor, the new policy direction reflects a commitment to more sustainable and market-driven financial practices, aimed at strengthening monetary discipline and improving accountability in credit allocation.
Analysts say the move signals a broader shift in Nigeria’s monetary policy framework, with the CBN focusing on core functions such as price stability, inflation control, and financial system regulation.
The decision is expected to have far-reaching implications for sectors that previously depended on concessionary funding, including agriculture, manufacturing, and small and medium enterprises.
