Nigeria’s Net Domestic Credit (NDC) fell by 6.9 percent year-on-year in January 2026, dropping to N109.4 trillion from N102.4 trillion in the same month of 2025, according to the latest money and credit report from the Central Bank of Nigeria (CBN).
The NDC, which represents the total value of bank credit extended to both public and private sectors, showed a mixed trend between government and private sector lending. In January 2026, bank credit to the government stood at N34.2 trillion, while credit to the private sector reached N75.2 trillion. In comparison, the corresponding period in 2025 saw government credit at N25.03 trillion and private sector credit at N77.4 trillion.
Analysts said the decline in NDC reflects the impact of monetary policy easing as inflation continued its gradual moderation.
A closer look at quarterly trends highlights persistent fluctuations in credit extension. In the first quarter of 2025, NDC fell by 4.4 percent to N100.6 trillion from N105.2 trillion in December 2024. It continued to decline in Q2 and Q3 2025, by 2.8 percent and 1.1 percent respectively, before rebounding in Q4 2025 by 2.6 percent to N99.2 trillion.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), described the Central Bank’s recent monetary policy decisions, including the reduction of the Monetary Policy Rate (MPR), as “a welcome and timely intervention.” He noted that the lower MPR, combined with a reduced Cash Reserve Requirement (CRR), is expected to expand banks’ capacity to create credit and ease lending rates, thereby supporting business expansion, stimulating output growth, and creating jobs.
However, Yusuf stressed that monetary policy alone is insufficient to sustain economic growth. “Fiscal authorities must prioritise infrastructure to reduce production costs, strengthen the regulatory framework, and maintain fiscal consolidation to ensure macroeconomic stability and investor confidence,” he said.
David Adonri, analyst and Executive Vice Chairman at High Cap Securities Limited, also weighed in, expressing caution about the persistent contraction in credit. “The continued decline in bank credit raises concerns about business funding at a time when inflationary pressures and weak consumer demand are already squeezing the economy,” Adonri said.
The report underscores the delicate balance facing policymakers as Nigeria navigates efforts to stimulate private sector growth while managing public sector borrowing and maintaining overall macroeconomic stability.