According to data from the Central Bank of Nigeria, bank lending to the private sector decreased for the second successive month in February 2025.
Based on the information provided on the CBN’s website, loans extended to the private sector decreased to N73.66 trillion in February from N74.92 trillion in January, reflecting a 1.67 percent drop on a monthly basis.
It represents an additional decrease from the N75.96tn recorded in November 2024, the final reported month of the previous year.
Upon examining the details of the data, it was revealed that credits to the private sector have fluctuated between ₦71 trillion and ₦75 trillion over the past year, peaking in February 2024 at ₦80.86 trillion.
The delayed approval of the 2025 budget by the Federal Government along with the sluggish beginning of business operations during the year have been cited as reasons for the continuous reduction in credit extended to the private sector.
Nevertheless, the February Stanbic IBTC Bank Nigeria Purchasing Managers’ Index revealed the most significant enhancement in business circumstances since January 2024, marking the third successive month of growth within the private sector.
The document stated that the main PMI increased to 53.7 in February from 52.0 in January, indicating a robust enhancement in business circumstances each month.
Several factors contributed to this growth, including a significant rise in production levels during February—the highest since January 2024—owing to stronger sales driven by enhanced demand conditions.
Conversely, the government’s credit climbed to ₦26.49 trillion in February from ₦24.52 trillion in the preceding month. This figure peaked at ₦39.62 trillion in November 2024, suggesting a heightened interest among banks in funding governmental activities.
Acknowledgment to the private sector involves financial assets supplied by banking entities to companies and people via lending, investment, and various types of credit facilities.
Although the elevated interest rates in 2024 spurred bank lending, they posed a challenge for the real economy sectors.
The CBN Monetary Policy Committee decided to raise the Monetary Policy Rate six times consecutively in 2024, resulting in an overall increase of 875 basis points in the MPR from 18.75 percent at the beginning of January 2024.
During their meeting in February 2025, the Monetary Policy Committee of the Central Bank of Nigeria opted to keep the Monetary Policy Rate steady at 27.50 percent due to a slowdown in inflation rates.
The National Bureau of Statistics revised the Consumer Price Index, leading to a decrease inheadline inflation to 24.48 percent in January 2025. This downward trend continued intoFebruary with the rate falling to 23.18 percent, which influenced the Monetary PolicyCommittee’s decision to maintain their stance.
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