Yemisi Izuora
A Central Bank of Nigeria (CBN) report has confirmed concerns raised by the Manufacturers Association of Nigeria (MAN) on declining bank credits which has shrunk their growth.
The manufacturing sector appear to be grappling with a significant decline in bank credit, as lending to the crucial industry plummeted by 26 per cent 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 per cent to N8.309 trillion in January 2025 from N8.529 trillion in December 2024. The report further indicates a 3.4 per cent 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 per cent in February 2025, representing a 3.8 percentage point decline from 17.7 per cent in February 2024. Furthermore, its share decreased by 0.3 percentage points from 14.2 per cent 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 per cent 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 per cent, experienced a 6.11 per cent decline in credit flow during the review period.
Conversely, credit to the agriculture and industry sectors saw increases of 4.66 per cent and 4.98 per cent, 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 per cent of total credit, followed by agriculture at 5.41 per cent.
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.