In the first half of 2026, Nigerian banks reported a remarkable 62% increase in lending to traders, contrasting sharply with a 27% decline in credit for the manufacturing sector. This data, analyzed by Nairametrics Research from the Central Bank of Nigeria (CBN), highlights a significant shift in the allocation of bank credit across various sectors of the economy.
This trend is crucial as it indicates a growing preference among banks to finance trade and commerce over manufacturing. While sectors like agriculture, construction, and transportation also saw credit increases, the manufacturing sector's decline is particularly alarming. Manufacturing's share of total outstanding bank credit plummeted from 16.43% in H1 2022 to just 9.58% in H1 2026, suggesting a systemic issue that could hinder industrial growth and job creation in Nigeria.
The implications of this trend are far-reaching, not only for Nigeria but also for the broader African economy. A robust manufacturing sector is essential for sustainable economic development, and its decline could exacerbate trade imbalances and increase reliance on imports. As the CBN recently reduced its benchmark Monetary Policy Rate to 23%, the effectiveness of this move in stimulating lending to manufacturers remains to be seen. Stakeholders will be closely monitoring whether banks adjust their lending practices and if manufacturing credit begins to recover in subsequent reports.