Nigeria’s Net Domestic Credit (NDC) declined by 6.9 per cent year-on-year to N109.4 trillion in January 2026, down from N102.4 trillion recorded in the same period of 2025, according to the latest money and credit report released by the Central Bank of Nigeria.
NDC, which measures total bank lending to both the public and private sectors, reflects the overall level of credit flowing through the economy.
A breakdown of the report shows that bank credit to the government rose to N34.2 trillion in January 2026, compared to N25.03 trillion in the corresponding period of 2025. In contrast, credit to the private sector declined to N75.2 trillion from N77.4 trillion recorded a year earlier.
Quarterly data indicate a largely downward trend in credit conditions throughout 2025. NDC fell by 4.4 per cent in the first quarter to N100.6 trillion from N105.2 trillion in December 2024. The contraction continued in the second quarter, dropping by 2.8 per cent to N97.8 trillion, and further declined by 1.1 per cent to N96.7 trillion in the third quarter. However, the fourth quarter saw a modest rebound of 2.6 per cent, bringing NDC to N99.2 trillion.
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Analysts attribute the overall decline in credit to recent monetary policy adjustments, as inflation showed signs of easing.
Commenting on the development, Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), described the Central Bank’s decision to reduce the Monetary Policy Rate (MPR) as a timely intervention.
He noted that a lower MPR, alongside a reduction in the Cash Reserve Requirement (CRR), could enhance banks’ capacity to lend and reduce borrowing costs.
“This will support business expansion, stimulate output growth, and create jobs,” Yusuf said, while stressing that monetary easing must be complemented by fiscal reforms.
He urged fiscal authorities to prioritise infrastructure development, strengthen regulatory frameworks, and sustain fiscal discipline to ensure macroeconomic stability and boost investor confidence.
Also weighing in, David Adonri, Executive Vice Chairman at Highcap Securities Limited, warned that the continued contraction in credit could worsen economic pressures.
“The persistent contraction in credit raises concerns about business funding at a time when inflation and weak consumer demand are already squeezing the economy,” he said.
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.
