Nigeria’s Net Domestic Credit Falls 12.8% to ₦98.97 Trillion — CBN

Nigeria’s Net Domestic Credit (NDC) dropped by 12.8% year-on-year to ₦98.97 trillion in August 2025, according to the latest Money and Credit Report released by the Central Bank of Nigeria (CBN).

The NDC, which measures the total value of bank credit to both the private and public sectors, declined amid ongoing monetary policy easing as inflation continues to moderate.

A breakdown of the data shows that, as of August 2025, bank credit to the government stood at ₦23.133 trillion, while credit to the private sector amounted to ₦75.843 trillion, bringing total domestic credit to ₦98.97 trillion.

In comparison, during the same period in 2024, credit to the government was ₦39.391 trillion, while private sector credit reached ₦74.072 trillion, summing up to ₦113.463 trillion.

Monthly Trend (2025)

The report further revealed that in January 2025, the NDC stood at ₦102.406 trillion, before rising slightly by 0.9% to ₦103.369 trillion in February. It then plunged by 34% in March to ₦68.177 trillion.

In the second quarter, NDC rebounded by 49.6% to ₦102.002 trillion in April, dropped again by 1.03% to ₦100.955 trillion in May, and declined further by 3.13% to ₦97.787 trillion in June. Although data for July was unavailable, the figure in August rose marginally by 1.2%.

Experts React

Commenting on the figures, Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), commended the CBN’s Monetary Policy Committee (MPC) for its decision to lower the Monetary Policy Rate (MPR), describing it as “a welcome and timely intervention.”

He noted that the combination of a reduced MPR and a lower Cash Reserve Ratio (CRR) could expand banks’ capacity to extend credit and reduce lending rates.

“This will support business expansion, stimulate output growth, and create jobs,” Yusuf said.

However, he cautioned that monetary policy alone cannot revive the economy without strong fiscal action.

“Fiscal authorities must prioritise infrastructure to reduce production costs, strengthen the regulatory environment, and sustain fiscal consolidation to ensure macroeconomic stability and investor confidence,” he added.

Also reacting, David Adonri, Executive Vice Chairman of HighCap Securities Limited, warned that the sustained contraction in credit poses a threat to business funding at a time when inflation, foreign exchange instability, and weak consumer demand are straining the economy.

“The persistent contraction in credit raises concerns about business funding when inflation and FX pressures are already squeezing the economy,” Adonri stated.

He added that Nigeria’s policy adjustments align with broader monetary easing trends across Africa.

“Central banks across the continent are easing rates as inflation cools. Ghana recently cut its policy rate by 350 basis points to 21.5%, and Kenya lowered its benchmark rate to 9.5% in mid-August. Nigeria’s MPR remains one of the highest in Africa, reflecting ongoing inflationary pressures,” he said.

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