Bank credit to Nigeria’s manufacturing sector declined by N1.90 trillion to N5.19 trillion in June 2026, representing a 26.8% contraction from N7.09 trillion a year earlier.
Figures attributed to the Central Bank of Nigeria (CBN) showed that total private-sector credit rose by approximately 8% to N62.79 trillion from N58.16 trillion, indicating a widening gap between financing available to manufacturers and the broader economy.
The decline reduced manufacturing’s share of outstanding private-sector credit from approximately 12.2% to 8.3%, raising concerns about banks’ exposure to industrial businesses at a time when Nigeria is seeking to strengthen domestic production.
Manufacturing credit fell consistently during the first five months of 2026, declining from N6.57 trillion in January to N6.37 trillion in February and N5.77 trillion in March.
The outstanding balance dropped further to N5.32 trillion in April and N5.02 trillion in May before recovering slightly to N5.19 trillion in June.
Despite the monthly improvement, manufacturers ended the first half with approximately N1.38 trillion less in outstanding bank credit than at the beginning of the year.
The contraction has implications for businesses that depend on bank financing to purchase raw materials, acquire machinery, expand factories and maintain working capital.
Manufacturers already contend with high energy costs, infrastructure deficiencies, transportation expenses and exchange-rate volatility, making access to affordable financing critical to sustaining production.
Commercial banks, meanwhile, must balance lending opportunities against credit risks, funding costs and borrowers’ repayment capacity.
The reduction in manufacturing credit does not necessarily indicate that banks rejected N1.90 trillion in new loan applications as outstanding balances can also decline through repayments, weaker borrowing demand and other adjustments.
Nevertheless, the figures suggest that manufacturing has not benefited proportionately from the expansion in aggregate private-sector credit.
The development also raises questions about the potential impact of Nigeria’s banking recapitalisation programme on lending to productive sectors.
Although stronger bank capital can improve lending capacity, manufacturers will require financing arrangements that reflect their longer investment cycles and operating conditions.
The CBN reduced its Monetary Policy Rate to 23% in September 2026, a development that could eventually support lower borrowing costs if commercial banks adjust their lending rates.
However, the June credit figures predate that decision, and any improvement in manufacturing financing will depend on subsequent lending conditions.
For Nigeria, reversing the contraction in industrial credit will be important to supporting factory expansion, employment creation and efforts to reduce dependence on imported manufactured goods.
The next sectoral credit figures will provide a clearer indication of whether financing is returning to manufacturing or whether banks are continuing to direct a greater share of credit towards other economic activities.