Manufacturing credit in Nigeria drops 34% despite N4.65 trillion bank recapitalisation
Manufacturing credit in Nigeria fell by 33.8% from N8.53 trillion in December 2024 to N5.65 trillion in August 2026.
In Brief
- •Manufacturing credit in Nigeria fell by 33.8% from N8.53 trillion in December 2024 to N5.65 trillion in August 2026.
- •The sector's share of total bank credit declined from 17.4% in December 2023 to 8.7% in August 2026.
- •Despite raising N4.65 trillion through bank recapitalisation, banks are directing more financing towards trade and commerce than manufacturing.
- •Private-sector credit in Nigeria stands at 13% of GDP, compared with 38.1% in lower-middle-income economies.
- •High borrowing costs, with bank lending rates between 19% and 32.6%, remain an obstacle to industrial financing.
Why It Matters
The decline in manufacturing credit despite the bank recapitalisation highlights the challenges faced by Nigeria's industrial sector. Reduced access to credit can hinder industrial growth, employment creation, and export expansion. The shift in financing towards trade and commerce suggests a misalignment between bank priorities and the needs of key economic sectors. Addressing these issues is crucial for unlocking private investment, improving productivity, and creating sustainable jobs in Nigeria.
Key Details
- Manufacturing credit (August 2026)
- N5.65 trillion
- Manufacturing credit (December 2024)
- N8.53 trillion
- Manufacturing credit decline
- 33.8%
- Manufacturing share of total bank credit (August 2026)
- 8.7%
- Manufacturing share of total bank credit (December 2023)
- 17.4%
- Bank recapitalisation funds raised
- N4.65 trillion
- Private-sector credit as % of GDP (2025)
- 13%
- Bank lending rates range
- 19% to 32.6%
Context & Background
Nigeria's banking recapitalisation exercise, launched in March 2024 and concluded in March 2026, aimed to strengthen the financial sector's balance sheets. The exercise raised N4.65 trillion in fresh capital, with 33 of 37 banks meeting the new minimum capital requirements. Domestic investors contributed 72.6% of the funds, while foreign investors accounted for 27.4%.
Original Reporting & Sources
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