Nigeria’s manufacturing sector is grappling with a significant decline in bank credit, as lending to the crucial industry plummeted by 26% year-on-year (YoY) to N8 trillion in February 2025. This marks a substantial decrease from the N10.9 trillion recorded in the same period last year, according to the Central Bank of Nigeria (CBN).
The CBN’s latest economic report for February 2025 reveals a persistent downward trend in credit allocation to manufacturing, noting declines for two consecutive months. Month-on-month (MoM) figures show banks’ lending to the sector fell by 2.6% to N8.309 trillion in January 2025 from N8.529 trillion in December 2024. The report further indicates a 3.4% MoM drop to N3.029 trillion in February 2025.
This contraction in lending has also reduced the manufacturing sector’s share of total private sector lending. It fell to 13.9% in February 2025, representing a 3.8 percentage point decline from 17.7% in February 2024. Furthermore, its share decreased by 0.3 percentage points from 14.2% in January 2025.
The CBN report also highlighted an overall reduction in lending to key sectors of the economy in February, with total credit by Other Depository Corporations (ODCs) decreasing by 1.12% to N57.94 trillion at the end of February, from N58.60 trillion at the end of January 2025. The services sector, which holds the largest share of credit at 52.10%, experienced a 6.11% decline in credit flow during the review period.
Conversely, credit to the agriculture and industry sectors saw increases of 4.66% and 4.98%, respectively. The CBN stated that these increases indicate “sustained policy support for food security and industrial growth.” In terms of sectoral distribution, after services, industry accounted for 42.49% of total credit, followed by agriculture at 5.41%.
The data underscores a concerning trend of reduced access to finance for Nigeria’s manufacturing sector, a critical driver of economic diversification and job creation, despite targeted support for other productive sectors like agriculture and broader industry.
