CBN’s intervention funds fuelling inflation, World Bank warns Nigeria

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The World Bank has said the Central Bank of Nigeria’s development finance intervention is fuelling inflation in the short term and weakening the ability of the apex bank to control inflation.

The CBN disclosed this in its ‘Nigeria Development Update (June 2022): The Continuing Urgency of Business Unusual.’

It said, “The CBN’s continued provision of heavily subsidised funding to certain sectors undermines commercial banks that lend on a risk-adjusted pricing basis and needs to be dialled down”.

According to the global bank, the CBN’s continued provision of subsidised funding to certain sectors has to slow down as it is undermining the ability of commercial banks to lend on a risk-adjusted pricing basis. It added that the apex bank’s disbursement in the private sector as its share of private sector credit rose from 6.5 per cent in 2019 to 10 per cent in 2021.

The bank stated that while the banking system had proved resilient in the face of the pandemic, the operating environment for banks and firms has become more challenging recently.

While warning that loan quality over the next several quarters is likely to deteriorate, expanding government programmes to support micro, small, and medium enterprises is a priority to protect viable and vulnerable MSMEs against rising uncertainty.



Abisola Adebayo is a Reporter/Presenter/Social Media Manager for Tv360Nigeria. She is a first class graduate of the department of Mass Communication at Fountain University, Osogbo. Abisola is currently running her Masters Degree at the University of Lagos. The Social Media savvy young lady is ambitious and driven, likes trying new things and sets new goals for herself. Always looking for an opportunity to do better and achieve greatness.


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