CBN’s N75 Trillion Credit score Milestone to Personal Sector Falls Flat as Productiveness Disaster Deepens

BY BLAISE UDUNZE

Nigeria’s monetary system is flashing pink, and never due to a shortage of cash. Satirically, the Central Bank of Nigeria (CBN) and the nation’s banking proudly tout a historic rise in private-sector credit score, saying figures hovering round N75 trillion all through 2024-2025. On paper, this appears to be like like a funding growth, an indication that companies are borrowing, investing, increasing, and constructing. However on the bottom, the nation’s actual sector tells a really completely different story.

Producers which might be the spine of business output have withdrawn en masse from financial institution loans, their mortgage books collapsing by an alarming 20.3 p.c inside a single yr. SMEs, which represent over 90 p.c of Nigeria’s companies and practically half of the nationwide GDP, stay shut out of formal credit score. Banks themselves are quietly battling rising non-performing loans (NPLs), with a number of establishments breaching the CBN’s 5 p.c regulatory threshold. In the meantime, the official “N75 trillion” credit score determine hangs within the air like an phantasm that seemed to be massive, spectacular, however dangerously deceptive. This characteristic unpacks the contradiction. If credit score is certainly booming, the place did the cash go? And why is the true financial system shrinking away from financial institution financing at a time when it needs to be increasing?

The monetary statements of Nigeria’s prime producers for the primary 9 months of 2025 present a coordinated withdrawal from financial institution credit score. Their combination financial institution borrowings plunged from N2.526 trillion in 2024 to N2.014 trillion in 2025, a dramatic 20.3 p.c drop. The small print are hanging:

–       BUA Meals fell from N1.559 trillion to N1.105 trillion;

–       Nestlé Nigeria from N653.7 billion to N521.01 billion;

–       Nigerian Breweries from N204.17 billion to N162.17 billion.

–       NASCON’s borrowings dropped 98percent, from N3.3 billion to N67 million.

–       Others: Dangote Cement, Dangote Sugar, Guinness, and Worldwide Breweries took no new loans.

These are usually not marginal corporations however among the most capital-intensive, employment-generating entities within the nation. Their exodus from financial institution borrowing is a referendum on Nigeria’s brutal credit score surroundings, the place the Financial Coverage Price of 27-27.5 p.c has pushed efficient lending charges properly above 30 p.c, making loans unaffordable even for working capital.

The retreat has slashed their financing prices by 52.8 p.c, from N1.4 trillion to N662 billion. This isn’t as a result of rates of interest fell; they didn’t. Companies merely stopped borrowing.

Finance professional David Adonri describes it bluntly: “Debtors shun financial institution credit score… lending charges haven’t come down materially. Banks’ earnings could fall under expectations.”

However the greater concern isn’t banks’ earnings, it’s the financial system’s capacity to speculate and develop.

That is the query that unsettles economists, business gamers, and SMEs alike.

If producers pull again, SMEs stay excluded, and retail borrowing is suppressed; who receives the N75 trillion? What did it finance?

The reply reveals that Nigeria’s credit score allocation stays opaque; nonetheless, historic patterns and up to date monetary information level in three instructions. Much more regarding are latest claims that the modest mortgage development recorded in 2024-2025 isn’t commensurate with the explosive enlargement of banks’ stability sheets.

This means that the system is rising with deposits rising, belongings swelling, FX revaluation inflating stability sheets, however precise lending to the productive financial system is barely shifting.

The credit score development being celebrated is subsequently not solely concentrated but additionally superficial and disconnected from stability sheet realities.

1. Lending focus in massive company and authorities entities

For many years, banks have most popular lending to massive firms and government-linked entities like:

–       Oil & Fuel

–       Conglomerates and buying and selling teams

–       Authorities contractors

–       Monetary market operators

–       Giant debtors with FX publicity

Even CBN’s earlier analysis reveals that solely 5-6 p.c of whole financial institution credit score traditionally reaches SMEs.

Given the dearth of detailed public information, it’s cheap to deduce that the majority of the N75 trillion nonetheless flows to:

–       Giant firms

–       Treasury operations

–       Prime prospects

–       Massive-ticket debtors with government-linked contracts.

Specialists warn that this displays a monetary system drifting away from the true financial system, a pattern Muda Yusuf describes as “worrisome and harmful.”

2. Banks are additionally parking funds in authorities securities.

Business banks prioritized lending to the federal government by investing in T-bills, FGN Bonds, and OMO devices, the place returns are excessive and risk-free. Over the previous two years, Nigerian banks have channeled N20.4 trillion into treasury payments, bonds, and different fixed-income devices, reaping risk-free returns fairly than funding productive ventures. This “securities entice” is worthwhile for banks however disastrous for the financial system.

A government-backed 19–22 p.c yield is extra enticing than lending to an SME at 27-35 p.c with a excessive chance of default.

3. FX revaluation results and rollovers

Parts of the N75 trillion will not be new lending in the true sense however the results of regulatory reclassifications, rollovers, FX revaluation on foreign-currency loans, and enormous concentrated credit score exposures. This creates the phantasm of expanded credit score with out tangible productiveness features.

Nonetheless, SMEs, which contribute 46.3 p.c of GDP and make use of thousands and thousands, stay locked out of the credit score system because of punitive rates of interest, excessive collateral calls for, lack of economic documentation, bureaucratic processes, and weak credit-scoring techniques. Regardless of accounting for 97 p.c of companies and practically 90 p.c of casual jobs, SMEs obtain solely 5 p.c of economic financial institution lending. It is a structural failure. SMEs stay virtually fully disconnected from Nigeria’s celebrated “N75 trillion credit score growth.”

Producers’ 2025 outcomes present turnover up 37.9 p.c and revenue swinging from a N116 billion loss to N2.5 trillion achieve. However specialists like Muda Yusuf and Clifford Egbomeade warn that these enhancements are pushed primarily by:

–       Inflationary pricing changes, not elevated manufacturing.

–       Positive factors are additionally supported by exchange-rate stability.

–       Diminished debt burden, not operational effectivity.

Nigeria dangers mistaking nominal development for actual productiveness.

In the meantime, rising non-performing loans fueled by excessive rates of interest, inflation, weakened shopper demand, and FX volatility have pushed some banks above the CBN’s 5 p.c NPL ceiling, additional proscribing their willingness to lend, particularly to SMEs.

Even the private-sector credit score pattern contradicts the headline determine. All through 2025, credit score ranges have proven repeated declines:

–       February’s N77.3 trillion dropped to N76.3 trillion,

–       N75.9 trillion in March,

–       Adopted by a short lived rebound to N78.1 trillion in April,

–       Could-August declined to N75.8 trillion.

These repeated drops replicate weakened urge for food for borrowing, tighter financial institution lending, liquidity pressures, and borrower misery. A real credit score growth doesn’t transfer on this course.

The Human Value of an Economic system with out Productiveness

The results of weak productiveness are usually not summary. They present up in starvation, jobs, poverty, life expectancy, and residing requirements. Beneath is the place Nigeria’s disaster turns into simple.

–       It’s Not Simply Rising, it’s deepening

–       In response to the World Financial institution, 139 million Nigerians now reside in poverty. That’s six in ten Nigerians. No nation with this scale of poverty can declare actual financial progress.

SBM Intelligence, in a scathing overview of the federal government’s financial reforms, famous that this administration of presidency has didn’t carry Nigerians’ residing requirements, regardless of the loud claims of macroeconomic stability.

Life Expectancy in Nigeria Is Now the Lowest within the World

The UN’s 2025 World Well being Report ranked Nigeria’s life expectancy at 54.9 years, the worst globally, far under the world common of 73.7 years. This decline is attributed to:

–       Insecurity

–       Poor healthcare entry

–       Rising poverty

–       Dietary deficiencies

–       Weak social welfare

A productive financial system will increase life expectancy; a collapsing one shortens it.

Starvation Is the Actual Inflation Index

Whereas official inflation experiences present “stabilisation,” the lived actuality says in any other case.

Within the kitchens of Lagos, within the cries of hungry youngsters, and within the struggles of market ladies, a harsher reality is spoken day by day: Empty pots don’t lie, and starvation, not percentages, is Nigeria’s actual inflation index.

Debt Explosion Is Eroding Nigeria’s Future

Since President Bola Ahmed Tinubu took workplace in 2023:

–       Nigeria’s public debt surged from N33.3 trillion-N152.4 trillion. A staggering 348.6 p.c improve in lower than two years

Economies don’t collapse in a single day; they deteriorate progressively. Nigeria is flashing each warning sign.

Unemployment Seems “Steady,” However Youth Joblessness Is Rising

The Worldwide Labour Organisation (ILO) experiences that whereas Nigeria’s headline unemployment price has fallen to 4.3 p.c, youth unemployment has risen to six.5 p.c. A youthful inhabitants with no jobs is a time bomb for the financial system.

Monetary System Delinking from the Actual Economic system

Nigeria’s monetary system seems to be delinking from the true financial system. Excessive rates of interest make loans too costly, producers lower borrowing, SMEs are excluded, banks channel funds into T-bills, NPLs rise, banks tighten additional, and private-sector development slows. This suggestions loop is harmful.

Financial authorities have prioritised stabilization, attaining a firmer naira, non permanent FX calm, and lowered speculative strain, however at the price of choking credit score, suppressing funding, weakening job creation, and widening the disconnect between banks and the productive financial system. The restoration, as Egbomeade notes, is “fragile and simply reversible.”

To reverse the pattern, Nigeria should rebuild the credit score pipeline. To interrupt the cycle, three pressing reforms are wanted:

1. The CBN ought to publish clear, disaggregated credit score information.

This should present credit score allocation by agency dimension, area, sector, and efficiency.

2. Broaden focused credit score ensures for SMEs and producers.

Deposit cash banks and the federal government should strengthen SME and manufacturing credit score channels by way of expanded ensures.

3. Diminished collateral limitations and adopted different credit score scoring, stronger BOI pipelines.
4. Incentives for real-sector lending by way of tax breaks and prudential reduction.
5. Most significantly, rates of interest should progressively fall to ranges that assist funding and manufacturing whereas sustaining FX stability. Credit score can’t revive with 30-35 lending charges.

Nigeria’s N75 trillion private-sector credit score figures could look spectacular, however producers have withdrawn, SMEs have little entry, banks are risk-averse, NPLs are rising, the true sector is struggling, debt is exploding, Life expectancy is collapsing, starvation is spreading, productiveness stays weak, and credit score ranges are trending downward. The true query is not how massive the quantity is however who really acquired it, what it financed, and what it produced. Till credit score flows to manufacturing, business, SMEs, and innovation, Nigeria will proceed celebrating massive numbers whereas the true financial system gasps for oxygen. It’s time to cease counting the trillions and begin counting the affect.

Blaise, a journalist and PR skilled, writes from Lagos, could be reached by way of: blaise.udunze@gmail.com