Lagos, Nigeria – Nigeria’s Net Domestic Credit (NDC) fell by 12.8% Year-on-Year (YoY) in August 2025, declining to N98.97 trillion, according to the Central Bank of Nigeria (CBN) latest money and credit report.
The NDC, which measures total bank credit extended to both the public and private sectors, serves as a key indicator of liquidity and credit availability in the economy. Analysts note that the decline reflects monetary policy easing as inflation continues to moderate.
Breakdown of Credit:
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Government Credit: N23.133 trillion (August 2025) vs N39.391 trillion (August 2024)
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Private Sector Credit: N75.843 trillion (August 2025) vs N74.072 trillion (August 2024)
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Total NDC: N98.97 trillion vs N113.463 trillion YoY
The monthly trend shows fluctuations in credit allocation in 2025:
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January: N102.406 trillion
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February: N103.369 trillion (+0.9%)
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March: N68.177 trillion (-34%)
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April: N102.002 trillion (+49.6%)
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May: N100.955 trillion (-1.03%)
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June: N97.787 trillion (-3.13%)
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August: N98.97 trillion (+1.2% from July; July data unavailable)
Analyst Commentary:
Dr. Muda Yusuf, CEO of The Centre for the Promotion of Private Enterprise (CPPE), commended the CBN’s Monetary Policy Committee (MPC) for reducing the Monetary Policy Rate (MPR) and Cash Reserve Ratio (CRR), describing the move as a “welcome and timely intervention.”
“The lower MPR combined with a reduced CRR should expand banks’ capacity to create credit and ease lending rates. This will support business expansion, stimulate output growth, and create jobs,” Yusuf said.
However, he cautioned that monetary easing alone is insufficient, urging fiscal authorities to prioritize infrastructure investment, regulatory strengthening, and fiscal consolidation to sustain macroeconomic stability and investor confidence.
David Adonri, Executive Vice Chairman at High Cap Securities Limited, noted concerns about contracting credit amid inflationary pressures, FX volatility, and weak consumer demand, stressing the need for a balanced monetary and fiscal approach.
He added:
“Nigeria’s move is part of a wider continental trend. Central banks across Africa are easing policy as inflation cools. Ghana recently cut its policy rate by 350 basis points to 21.5%, while Kenya reduced its benchmark rate to 9.5% in mid-August. Nigeria’s MPR remains among the highest in Africa, reflecting ongoing inflationary pressures.”
Outlook:
The CBN’s monetary policy easing is aimed at stimulating credit creation for businesses, reducing borrowing costs, and sustaining economic growth. Analysts, however, emphasize that complementary fiscal reforms are critical to ensure these measures translate into tangible improvements in credit availability and economic output.
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Reporting by Godwin Okafor, The Naija247news in Lagos, Nigeria.
