Nigeria’s net domestic credit (NDC) dropped by 12.8% year-on-year to ₦98.97 trillion in August 2025, according to the latest data from the Central Bank of Nigeria (CBN).
The figure reflects a slowdown in both public and private sector lending, attributed by analysts to monetary policy easing and a gradual decline in inflation.
Data from the CBN show that as of August, credit to the government stood at ₦23.13 trillion, while private sector credit amounted to ₦75.84 trillion, bringing total domestic credit to ₦98.97 trillion. In August 2024, total credit stood at ₦113.46 trillion, with government credit at ₦39.39 trillion and private sector credit at ₦74.07 trillion.
Economic analysts say the contraction mirrors cautious lending by banks amid economic headwinds.
Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), described the decline as an expected outcome of policy adjustment but urged fiscal authorities to complement monetary reforms with structural measures.
“Reducing the Monetary Policy Rate (MPR) and Cash Reserve Ratio (CRR) should expand banks’ lending capacity and stimulate growth,” Yusuf said. “However, fiscal authorities must also invest in infrastructure and regulatory efficiency to sustain macroeconomic stability.”
Similarly, David Adonri, Executive Vice Chairman of HighCap Securities Limited, expressed concern that reduced credit growth could limit business funding amid ongoing inflation and foreign exchange pressures.
“Businesses are already struggling with weak consumer demand and rising costs. A further credit squeeze could slow production and job creation,” he warned.
Experts also noted that Nigeria’s monetary easing aligns with a broader African trend as several countries, including Ghana and Kenya, recently cut policy rates to stimulate growth following a decline in inflation.
Despite the easing, Nigeria’s MPR remains among the highest in Africa, underscoring the CBN’s cautious approach in balancing inflation control with economic expansion.
