Nigeria’s Net Domestic Credit (NDC) declined by 12.8% year-on-year (YoY) in August 2025 to ₦98.97 trillion, according to the Central Bank of Nigeria’s (CBN) latest money and credit report.
The NDC represents the total value of bank credit extended to both the private and public sectors. Analysts attribute the decline to ongoing monetary policy easing, which reflects efforts to stimulate the economy as inflation continues to moderate.
A review of the monthly trend for the year shows that the NDC began at ₦102.406 billion in January, rising slightly by 0.9% to ₦103.369 billion in February. However, in March, it fell sharply by 34% to ₦68.177 billion.
In the second quarter of 2025, the NDC rebounded significantly, climbing by 49.6% to ₦102.002 billion in April. This growth was short-lived, as it dipped by 1.03% to ₦100.955 billion in May, and further declined by 3.13% to ₦97.787 billion in June. While there was no available data for July, the CBN report showed that in August, the NDC rose slightly by 1.2%.
Commenting on the development, Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), welcomed the Monetary Policy Committee’s (MPC) decision to lower the Monetary Policy Rate (MPR), describing it as a “welcome and timely intervention.”
He explained that the combination of a lower MPR and reduced Cash Reserve Ratio (CRR) would enhance banks’ capacity to extend credit and lower lending rates, thereby supporting business growth, output expansion, and job creation.
However, Yusuf cautioned that monetary easing alone would not be sufficient to drive sustainable economic growth. He urged the government to complement the CBN’s efforts with robust fiscal reforms, emphasizing the need to improve infrastructure, reduce production costs, strengthen the regulatory environment, and maintain fiscal discipline to bolster macroeconomic stability and investor confidence.
Also commenting, David Adonri, Executive Vice Chairman of High Cap Securities Limited, expressed concern over the persistent contraction in credit, noting that it could undermine business financing at a time when inflationary pressures, foreign exchange volatility, and weak consumer demand are already constraining the economy.
