Nigeria's Private Sector Credit Drops by Nearly N1 Trillion

Private sector credit in Nigeria has seen a significant decline, dropping by almost N1 trillion year-on-year, from N76.2 trillion in February 2025 to N75.6 trillion in February 2026, according to updates from the Central Bank of Nigeria (CBN). This drop comes as the banking sector prepares for a recapitalization effort, the last of which occurred in 2004 under Prof.

Charles Soludo, when the capital base for commercial banks was raised from N2 billion to N25 billion. The current recapitalization aims to strengthen banks' capital adequacy ratios, which must remain above the international Basel benchmark of 10% for national banks and 15% for international banks.

Financial analyst Efosa Aluyi expressed optimism that banks would be able to expand credit to the private sector following the new capital raise. The recapitalization process is expected to create a stronger platform for banks to provide growth within the broader economy, especially after significant credit growth was observed post-previous capital raises.