The NDC, which represents the total value of bank lending to both the public and private sectors, declined from ₦113.46 trillion in August 2024, reflecting what analysts describe as the early effects of the CBN’s monetary policy easing amid a gradual slowdown in inflation.
A breakdown of the figures shows that in August 2025, credit to the government stood at ₦23.13 trillion, while credit to the private sector amounted to ₦75.84 trillion. In contrast, the corresponding figures in August 2024 were ₦39.39 trillion and ₦74.07 trillion, respectively.
Monthly Trend Shows Mixed Movements
Vanguard’s analysis indicated fluctuating movements throughout 2025. The NDC opened the year at ₦102.41 trillion in January, rising slightly by 0.9% to ₦103.37 trillion in February before plunging by 34% to ₦68.18 trillion in March.
In the second quarter, credit rebounded strongly, rising 49.6% to ₦102.00 trillion in April, but later slipped by 1.03% in May and 3.13% in June to settle at ₦97.79 trillion. Data for July was not published, but the CBN reported a modest 1.2% uptick in August.
Analysts Applaud Easing But Warn on Fiscal Bottlenecks
Commenting on the development, Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), lauded the CBN’s Monetary Policy Committee (MPC) for its recent decision to reduce the Monetary Policy Rate (MPR), describing it as “a welcome and timely intervention.”
He said the lower MPR, alongside a reduced Cash Reserve Ratio (CRR), would “expand banks’ capacity to create credit, ease lending rates, and stimulate business expansion, output growth, and job creation.”
However, Yusuf stressed that monetary easing alone is not sufficient, urging fiscal authorities to complement it with structural reforms.
“Fiscal authorities must prioritise infrastructure to reduce production costs, strengthen the regulatory framework, and sustain fiscal consolidation to ensure macroeconomic stability and investor confidence,” he said.
Caution Over Weak Business Funding
In his assessment, David Adonri, Executive Vice Chairman of HighCap Securities Limited, warned that the continued contraction in domestic credit could worsen funding challenges for businesses already burdened by high inflation, foreign exchange pressures, and weak consumer demand.
He noted that Nigeria’s policy stance mirrors a broader African trend toward monetary easing as inflation cools across the continent.
“Ghana recently cut its policy rate by 350 basis points to 21.5 percent, while Kenya lowered its benchmark rate to 9.5 percent in mid-August,” Adonri said. “Nigeria’s MPR, however, remains among the highest in Africa, reflecting sustained inflationary pressures.”
Economists say the coming months will determine whether the CBN’s policy adjustments can balance the twin goals of price stability and credit expansion, as Nigeria seeks to revive growth without reigniting inflation.