Nigeria’s Net Domestic Credit (NDC) declined by 12.8% year-on-year in August 2025, falling to 98.97 trillion Naira, according to the Central Bank of Nigeria’s (CBN) latest Money and Credit report.
NDC represents the total value of bank credit extended to both the public and private sectors. Analysts attribute the decline to monetary policy easing, as inflation continues to trend downward.
Vanguard’s analysis revealed that in August 2025, bank credit to the government stood at 23.133 trillion Naira, while credit to the private sector reached 75.843 trillion Naira, bringing the total NDC to 98.97 trillion Naira.
In comparison, during the same period in 2024, credit to the government was 39.391 trillion Naira, and credit to the private sector stood at 74.072 trillion Naira, resulting in a total NDC of 113.463 trillion Naira.
On a monthly basis, NDC stood at 102.406 trillion Naira in January 2025 and increased by 0.9% to 103.369 trillion Naira in February. However, it dropped sharply by 34% to 68.177 trillion Naira in March.
In the second quarter, NDC rebounded by 49.6% to 102.002 trillion Naira in April. It then declined by 1.03% to 100.955 trillion Naira in May and further dropped by 3.13% to 97.787 trillion Naira in June. While July data was unavailable, August saw a modest increase of 1.2%.
Commenting on the development, 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), describing it as “a welcome and timely intervention.”
Yusuf noted that the lower MPR, combined with a reduced Cash Reserve Ratio (CRR), should enhance banks’ capacity to extend credit and reduce lending rates. “This will support business expansion, stimulate output growth, and create jobs,” he said.
However, he cautioned that monetary easing alone is not enough. “Fiscal authorities must prioritize infrastructure to reduce production costs, strengthen the regulatory framework, and sustain fiscal consolidation to ensure macroeconomic stability and investor confidence,” Yusuf added.
David Adonri, Executive Vice Chairman at High Cap Securities Limited, also expressed concern over the persistent contraction in credit. “It raises serious questions about business funding at a time when inflation, foreign exchange pressures, and weak consumer demand are already squeezing the economy,” he said.
Nigeria’s monetary shift aligns with a broader trend across Africa, where central banks are easing policy as inflation cools. Ghana recently cut its policy rate by 350 basis points to 21.5%, while Kenya lowered its benchmark rate to 9.5% in mid-August. Nigeria’s MPR remains among the highest on the continent, reflecting ongoing inflationary pressures.
