Banks’ credit to Nigeria’s manufacturing sector has sharply declined, dropping by 26% year-on-year to ₦8 trillion in February 2025, down from ₦10.9 trillion in the same period in 2024. This is according to the latest economic report released by the Central Bank of Nigeria (CBN), signaling a persistent contraction in funding to the sector for two consecutive months.
The CBN report also revealed a month-on-month decline in bank loans to manufacturers, falling by 2.6% to ₦8.309 trillion in January 2025 from ₦8.529 trillion in December 2024. The downward trend continued in February, with lending dropping by another 3.4% to ₦8.029 trillion.
As a result, the manufacturing sector’s share of total private sector credit also shrank. In February 2025, it accounted for just 13.9% of total lending—a steep drop from 17.7% recorded a year earlier. The sector’s share also slipped slightly from 14.2% in January 2025, indicating a gradual but steady decline in the flow of credit.
The broader lending landscape reflected similar caution from banks, with total credit extended to key sectors of the economy by Other Depository Corporations (ODCs) falling by 1.12% to ₦57.94 trillion at the end of February, compared to ₦58.60 trillion in January.
The services sector, which traditionally receives the largest share of credit, recorded a significant 6.11% decline in loan disbursements during the review period. Nonetheless, some sectors bucked the trend. Credit to agriculture and industry grew by 4.66% and 4.98%, respectively—suggesting targeted policy interventions to support food production and industrial development may be yielding results.
Despite these gains, the services sector maintained its dominance in total credit distribution, accounting for 52.10% of loans. It was followed by the industry sector with 42.49%, while agriculture trailed with just 5.41%.
The ongoing contraction in credit to manufacturers raises fresh concerns about the health of Nigeria’s industrial sector, which continues to grapple with high production costs, foreign exchange constraints, and weakening consumer demand. Analysts warn that sustained decline in funding could further erode industrial output and stall efforts aimed at economic diversification.
Industry stakeholders have long called for more supportive lending policies and improved access to affordable financing to revive the manufacturing sector—seen as critical to job creation and national growth.
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