Nigeria’s private sector credit declined sharply by over N14 trillion within two months, falling to N80.59 trillion in April 2026 from a 12-month high of N94.61 trillion recorded in February 2026, despite the Central Bank of Nigeria’s (CBN) earlier decision to ease monetary policy.

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This is according to the latest data released by the CBN.

However, the apex bank did not publish data for March 2026, leaving a gap in the reporting cycle.

The latest figures highlight continued weaknesses in lending to productive sectors of the economy, even as monetary authorities attempt to balance inflation control with economic growth support through cautious policy adjustments.

What the data is saying 

The latest CBN figures revealed a broad contraction in domestic credit conditions despite sustained liquidity growth within the banking system.

  • On a year-on-year basis, private sector credit remained above the N78.07 trillion recorded in April 2025, indicating that lending activity is still higher than levels seen a year earlier.
  • Net domestic credit also declined significantly to N120.18 trillion in April from N133.97 trillion in February, reflecting weaker lending activity across the financial system.
  • Other assets (net) dropped sharply to N11.88 trillion in April from N20.75 trillion in February, suggesting a major adjustment in banking sector asset composition during the period.

Despite the contraction in lending, net domestic assets increased to N100.97 trillion in April from N97.55 trillion in February, indicating that liquidity conditions within the banking system remained elevated.

More Insights 

The decline in private sector credit comes amid ongoing concerns over the structure and effectiveness of Nigeria’s credit system, particularly for sectors critical to economic growth such as manufacturing, agriculture, and small businesses.

  • At its 304th Monetary Policy Committee (MPC) meeting in February 2026, the CBN reduced the Monetary Policy Rate (MPR) by 50 basis points to 26.5% from 27%.
  • The apex bank retained the Cash Reserve Ratio (CRR) at 45% for commercial banks and 16% for merchant banks, while the Liquidity Ratio remained at 30%.
  • The Standing Facilities Corridor was also maintained at +50/-450 basis points around the MPR.

Financial analysts said the policy mix reflects the CBN’s attempt to strike a balance between containing inflationary pressures and supporting economic activity amid challenging macroeconomic conditions.

However, analysts noted that the impact of the modest rate cut may have been limited by lingering macroeconomic uncertainties, elevated borrowing costs, exchange rate pressures, and banks’ preference for investing in relatively risk-free government securities.

The Centre for the Promotion of Private Enterprise (CPPE) had earlier warned that structural weaknesses in Nigeria’s credit architecture continue to limit financing for productive sectors capable of driving industrial growth and job creation.

What you should know 

The decline in private sector credit contrasts with the continued expansion in Nigeria’s money supply, highlighting concerns that available liquidity may not be flowing efficiently into productive economic activities.