Personal loans obtained by Nigerians rose to an estimated N2.06tn in May 2026 as consumer credit continued to expand amid persistent cost pressures and weak consumer spending, according to the latest Economic Report of the Central Bank of Nigeria.

The figure, derived from data contained in the CBN’s May 2026 Economic Report, represents about 64.78 per cent of the N3.18tn total consumer credit outstanding during the month.

The report covers developments across the real, fiscal, financial and external sectors of the Nigerian economy.

According to the apex bank, consumer credit increased by 1.60 per cent from N3.13tn in April to N3.18tn in May, indicating that Nigerians borrowed an additional N50bn within one month.

The CBN attributed the increase to growth in both personal and retail loans, which rose by 1.98 per cent and 0.90 per cent respectively.

The bank said personal loans remained the largest component of consumer credit, accounting for 64.78 per cent, while retail loans represented the remaining 35.22 per cent.

Based on those proportions, personal loans stood at approximately N2.06tn at the end of May, while retail loans amounted to about N1.12tn.

The 1.98 per cent month-on-month increase in personal loans represents an increase of roughly N40bn during the period. Retail loans, which are more directly associated with the purchase of goods and services, recorded a slower 0.90 per cent increase.

The figures indicate that personal borrowing remained the main driver of Nigeria’s consumer-credit market, accounting for nearly two-thirds of outstanding consumer credit.

Economic pressures drive borrowing

The increase in borrowing occurred against a challenging economic backdrop, with the CBN reporting weak economic activity during May.

The bank’s composite Purchasing Managers’ Index stood at 49.60 points in May, slightly higher than the 49.40 points recorded in April but still below the 50-point mark that separates expansion from contraction.

The CBN said the contraction reflected subdued demand, declining new orders and elevated production costs. It also identified weak consumer spending and higher energy-related costs as major pressures on the industry and services sectors.

Inflation also remained elevated during the period. Headline inflation increased to 15.93 per cent in May from 15.69 per cent in April, with the CBN attributing the increase to persistent cost pressures and higher energy prices.

However, month-on-month inflation slowed to 1.75 per cent in May from 2.13 per cent in April.

The combination of rising consumer credit and weak consumer spending indicates that more households were turning to credit at a time when living and operating costs remained under pressure.

More Nigerians borrowing for consumption

The trend is also reflected in findings from the 2026 Access to Financial Services in Nigeria Survey by Enhancing Financial Inclusion & Advancement.

The survey found that 40.8 per cent of Nigerians borrowing from formal financial institutions now use loans mainly for coping and consumption needs, up from 31.7 per cent in 2023.

The increase of 9.1 percentage points made coping and consumption the largest purpose of formal borrowing, overtaking productive enterprise borrowing, which fell from 40.2 per cent in 2023 to 34.3 per cent in 2026.

Borrowing for household assets also declined from 25.2 per cent to 23.4 per cent.

The report warned that the shift towards consumption and coping borrowing raises concerns about whether credit is helping households build productive capacity or simply helping them manage financial pressures.

The survey covered 18,679 adults across Nigeria’s 36 states and the Federal Capital Territory, with data collected between April and June 2026 under the supervision of the National Bureau of Statistics.

Formal credit use increased from six per cent of adults in 2023 to 10 per cent in 2026, representing about 11.9 million Nigerians borrowing from regulated financial institutions.

When informal sources were included, 36 per cent of adults had access to some form of credit.

Credit use among informally employed Nigerians tripled from five per cent to 15 per cent during the period. Among Nigerians aged between 18 and 35, borrowing increased from four per cent to 10 per cent.

Borrowing among business owners also rose from four per cent to 10 per cent, while farmers recorded an increase from two per cent to six per cent.

Borrowers face repayment pressure

Despite the increase in access to credit, the survey highlighted significant financial stress among borrowers.

About 45.8 per cent of formal-credit users reported experiencing some or serious repayment stress, while 83.8 per cent reported ongoing financial stress.

The findings suggest that the growth in credit access has not necessarily translated into improved financial wellbeing for many Nigerians.

The survey also found that overall financial inclusion had reached 79 per cent, equivalent to about 94.2 million adults, while formal financial inclusion stood at 73 per cent.

However, only about one-quarter of Nigerian adults were considered financially healthy.

EFInA Chief Executive Officer, Foyinsolami Akinjayeju, said the findings showed that Nigeria needed to look beyond simply increasing access to financial services and focus on whether those services were improving people’s financial wellbeing.

EFInA Board Chairman, Dr Agnes Martins, similarly said access to financial services should be viewed as the beginning rather than the ultimate objective of financial inclusion.

The latest CBN figures therefore show a continued expansion in consumer credit, while the financial inclusion survey highlights a shift in the reasons Nigerians are borrowing, with a growing share turning to loans to cope with household pressures and consumption needs.

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Nigerian households became more pessimistic about their economic and financial conditions in September 2026, with a corresponding decline in their willingness to make major purchases, including houses, investments and other high-value items.

The development was contained in the latest Central Bank of Nigeria Household Expectations Survey, which showed that overall consumer sentiment fell to -18.7 index points in September, from -9.9 points in August.

The CBN said the decline reflected weaker household expectations about the economy, family finances and income, while essential expenses continued to take priority over major purchases.

Nigerians reluctant to buy homes

The survey showed that households remained hesitant to commit substantial portions of their income to major purchases.

The outlook index for house purchases stood at -68.2 points in September, making housing one of the areas with the strongest negative sentiment among the major purchase categories surveyed.

The outlook for acquiring cars and other motor vehicles stood at -67.3 points, while investments recorded -50.7 points. Household appliances and other consumer durables recorded -49.5 points, while the outlook for rent stood at -32.0 points.

The CBN said the figures showed that households were reluctant to spend large portions of their income on houses, vehicles and investments.

Buying conditions also remained below the 50-point threshold, which the survey uses to distinguish favourable from unfavourable conditions.

For September, respondents’ buying-condition indices for consumer durables, motor vehicles and buildings and landed properties stood at 19.4, 15.7 and 14.8 points, respectively.

The figures point to continued caution among households considering property purchases, at a time when income pressures and high living costs are competing with long-term spending plans.

Household confidence weakens

The overall consumer sentiment index declined by 8.8 points during the month.

The CBN’s index for current economic conditions stood at -21.5 points, indicating a negative assessment of prevailing economic conditions among households.

The Family Financial Situation Index was also negative at -23.9 points, while the Family Income Sentiment Index stood at -10.5 points.

The figures indicate that respondents remained concerned about both their household finances and income levels.

However, households expected conditions to improve gradually over a longer period.

Consumer sentiment was projected at -8.7 points for the following month and -0.4 points over the next three months. Over the six-month horizon, the index was projected to turn positive at 7.1 points.

The CBN said the expected improvement suggested that household willingness to spend could strengthen gradually if economic conditions improve.

Rising prices influence household priorities

The survey also showed that households perceived prices to be rising more strongly in September.

The Consumer Sentiments Index for average prices of selected items increased to 33.5 points in September, from 23.0 points in August.

The CBN said the increase indicated that households perceived the prices of selected goods and services to be high.

With household budgets under pressure, respondents continued to prioritise essential spending.

Food remained the dominant expenditure priority, followed by transportation, other household goods, education, electricity and water.

These categories were also expected to remain among the main areas of household expenditure over the following three and six months.

Housing demand faces affordability pressure

The weaker appetite for home purchases comes against a broader backdrop of pressure on household purchasing power and borrowing costs.

The CBN’s survey indicates that households are prioritising immediate necessities, leaving less room for major financial commitments such as buying homes, investing or acquiring property.

The reluctance is reflected not only in the negative outlook for house purchases but also in the low buying-condition index for buildings and landed properties.

For the housing sector, weaker household purchasing intentions can affect demand for residential properties, particularly where prospective buyers depend on savings or mortgage financing to complete purchases.

The CBN’s Monetary Policy Committee reduced the Monetary Policy Rate to 23 per cent at its September 21–22, 2026 meeting, down from 26.5 per cent previously. The committee also retained the Cash Reserve Requirement for deposit money banks at 45 per cent.

Despite the change in the policy rate, the household survey shows that consumers remained cautious in September, with financial concerns and perceptions of high prices continuing to influence spending decisions.

Essential spending remains dominant

The CBN survey further showed that households continued to concentrate their available income on necessities rather than discretionary and long-term purchases.

Food remained the leading expenditure priority, while transportation, household goods, education, electricity and water also featured prominently.

This spending pattern suggests that households are continuing to manage limited disposable income by prioritising immediate needs.

The CBN said sentiment across most expenditure categories was expected to strengthen slightly over the following six months, pointing to the possibility of a gradual improvement in household spending intentions.

For now, however, the September survey shows that housing, investments, vehicles and other major purchases remain areas where Nigerian households are exercising significant caution.

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President Bola Ahmed Tinubu has urged Nigerian banks to reduce their reliance on government securities and increase lending to businesses, infrastructure and other productive sectors of the economy.

Tinubu made the call at the 19th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja.

The President, who was represented by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the banking sector must help transform recent economic stability into stronger private-sector growth.

According to him, attractive returns on government securities had made lending to businesses less attractive to banks over the years.

He, however, said improving fiscal conditions should create more room for increased private-sector credit.

“So, from financing government, we need to move to financing growth,” Tinubu said.

Tinubu links recapitalisation to business lending

The President said stronger fiscal discipline would reduce pressure on government borrowing, while lower inflation could support reduced interest rates.

He explained that cheaper capital would encourage investment, production, job creation and higher incomes.

Tinubu also said the recently completed bank recapitalisation must go beyond strengthening banks’ balance sheets.

He stressed that the additional capital should translate into increased financing for Nigerian businesses and support their expansion across Africa.

“A bigger bank that does not finance a more productive economy is a sub-optimal outcome,” he said.

To encourage lending to productive sectors, Tinubu said the Federal Government was expanding guarantees, risk-sharing arrangements, blended finance and credit enhancements.

He identified the National Credit Guarantee Company as central to the strategy.

According to him, the measures would reduce lending risks and attract more private capital into productive investments rather than relying mainly on direct government funding.

President wants more long-term capital for infrastructure

Tinubu also called for increased mobilisation of long-term capital for infrastructure, industry, housing and energy.

He said Nigeria could not finance long-term development primarily with short-term funds.

The President urged deeper capital markets and stronger pension, insurance and asset-management sectors to mobilise domestic savings and foreign capital for long-term investment.

He added that Nigeria must compete aggressively for international capital because investors are primarily attracted by risk-adjusted returns.

“Capital is highly mobile. It is neither emotional nor patriotic; it goes where risk-adjusted returns are attractive and competitive,” he said.

Tinubu further said Nigeria was expected to return to the JPMorgan Bond Index soon, while the country’s capital market had recorded about 60 per cent year-to-date growth.

He said the developments reflected improving investor confidence and provided an opportunity to attract more capital for productive investment.

Tinubu identifies five priorities for financial sector

The President identified five priorities for building a resilient financial system: growth facilitation, inclusion, technology, long-term capital and trust.

On financial inclusion, he said having a bank account alone was not sufficient.

He argued that genuine inclusion should enable market women and young entrepreneurs to access affordable working capital based on viable cash flow rather than collateral they may not have.

On technology, Tinubu said artificial intelligence, open banking, digital identity and instant payments were transforming financial services.

He, however, warned that rapid digital expansion was also creating new vulnerabilities.

“Cybersecurity is now financial stability infrastructure,” he said, while calling for stronger data protection and fraud prevention.

Banks urged to support Nigerian businesses across Africa

Tinubu also urged banks to help Nigerian businesses become regional champions by financing exports and expansion through the African Continental Free Trade Area (AfCFTA).

He said the continental market, with more than 1.4 billion people, presented significant opportunities for Nigerian businesses.

The President urged banks to help transform micro-enterprises into large companies while redirecting capital from speculation towards production.

CBN says economic stability is returning

The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, represented by the Deputy Governor, Economic Policy, Philip Ikeazor, said Nigeria’s macroeconomic stability was gradually returning.

He said monetary and fiscal authorities were working more closely together but acknowledged concerns about when ordinary Nigerians would begin to feel the impact of the improving indicators.

According to him, the benefits were expected to reach Nigerians as the collaboration between both authorities continued.

Cardoso said the authorities were working towards bringing inflation permanently into single digits and were engaging state governments because subnational governments also contribute to inflationary pressures.

He also credited banks for accepting the burden associated with the CBN’s cash reserve requirement as part of efforts to restore economic stability.

The CBN governor said the apex bank had incurred substantial costs in managing liquidity, while banks and fiscal authorities had also faced the effects of tighter monetary conditions.

He added that Nigeria’s economic buffers had been tested by external shocks, including the Iran conflict, but remained sufficient to withstand the disruption.

CIBN proposes SME hubs nationwide

The President of CIBN, Dele Alabi, called for the establishment of scalable SME Hubs across Nigeria to connect small businesses with infrastructure, skills, technology, markets and finance.

Alabi said many micro, small and medium enterprises remained constrained by high operating costs, inadequate infrastructure, limited market access, low productivity and insufficient digital adoption.

He said the proposed hubs could reduce operating costs, improve the bankability of small businesses and create a stronger link between recapitalised banks and the real sector.

Alabi said the initiative formed part of the Institute’s IMPACT Vision, introduced after he became the 24th President and Chairman of Council in May.

He said the vision was designed to move CIBN from identifying industry problems to developing practical solutions focused on professional standards, capacity building and responsible innovation.

Alabi also warned that artificial intelligence and fintech were creating both opportunities and risks for the financial system, including cyber threats, data governance concerns, market concentration, job displacement and systemic risks.

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Nigeria’s inflation picture is showing mixed signals as headline inflation continues to slow while food prices rise at a much faster rate.

The National Bureau of Statistics (NBS) reported a 50-basis-point decline in headline inflation to 15.43 per cent in July. At the same time, food inflation climbed from 17.52 per cent to 20.31 per cent.

The latest figures suggest that the easing in overall inflation has not yet translated into lower food costs for households. Food remains one of the largest expenses for many families, making the increase a major concern for household purchasing power.

Building Material Prices Surge as Inflation, FX Crisis Push Construction Costs Higher

Food inflation records sharp monthly increase

Food inflation also recorded a significant month-on-month increase in July.

The rate reached 5.56 per cent, compared with 3.75 per cent in June and 2.98 per cent in May. This marked the strongest monthly increase since the rebasing of the Consumer Price Index.

The year-on-year trend has also moved higher for six consecutive months. Food inflation started the year at 8.9 per cent but has since more than doubled.

The latest increase adds to concerns that food prices could remain a major source of pressure even as other parts of the inflation basket begin to stabilise.

Core inflation offers some relief

Core inflation provided a different picture in July.

The measure fell to 14.97 per cent, its lowest level since January 2025. The decline could support the Central Bank of Nigeria’s assessment that underlying price pressures are gradually becoming more stable.

The Monetary Policy Committee has maintained the Monetary Policy Rate between 26.5 and 27.5 per cent over the past year.

Money balances increased from N117.24 trillion to N133.25 trillion by June, representing year-on-year growth of 13.7 per cent. Private-sector credit also rose from N76.13 trillion to N83.26 trillion during the period.

The August inflation report will provide the MPC with newer data before its September meeting.

Transport costs add to food prices

High transport and energy costs remain important factors behind the food price increase.

Diesel prices have almost doubled since the end of February, according to the report. Diesel is widely used by logistics operators, making changes in its price important for the cost of moving agricultural goods.

Petrol prices have also increased by about 50 per cent since early March. Higher fuel costs can raise the cost of transporting food from farms to wholesale markets and then to consumers.

Insecurity in major food-producing areas has also created supply challenges. Economists, including Centre for Promotion of Private Enterprise Chief Executive Dr Muda Yusuf, have identified insecurity and logistics problems as structural issues affecting food prices.

Heavy rainfall may have added further pressure by making road transport and food distribution more difficult.

State inflation rates show wide gaps

The national inflation figure also hides major differences between states.

Adamawa recorded the highest headline inflation rate in July at 33.03 per cent. Yobe followed with 25.2 per cent, while Anambra recorded 24 per cent.

Nasarawa had the lowest headline inflation rate at 7.9 per cent. Kebbi and Borno followed with 9.1 per cent each.

Food inflation was particularly high in Adamawa, where it reached 51.4 per cent. Katsina recorded 30.8 per cent, while Zamfara posted 30.7 per cent.

The NBS has warned that state-level inflation figures should not be compared directly because household spending patterns vary across locations.

Housing costs face indirect pressure

The continuing rise in food prices also has wider implications for Nigeria’s housing sector.

When families spend more on food and transport, they have less money available for rent, mortgage payments, savings and home purchases. This can make housing affordability more difficult, especially for low- and middle-income households.

Developers also face higher operating costs when fuel, transport and other inputs become more expensive. These costs can affect construction budgets and, ultimately, the prices of new homes.

The July inflation figures therefore present a mixed outlook. While lower headline and core inflation point to improving price stability, rising food costs show that many Nigerians continue to face strong pressure on their household budgets.

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More Nigerians are turning to bank loans to finance the purchase and construction of homes, with demand for housing-related credit recording a notable increase in the second quarter of 2026.

The development was disclosed by the Central Bank of Nigeria (CBN) in its Credit Conditions Survey Report for Q2 2026, which showed increased demand for loans across several segments of the economy, particularly housing and small-business financing.

According to the report, demand for credit to purchase houses rose to 9.6 index points during the quarter. Mortgage and re-mortgage lending to households also increased to 13.3 index points, indicating stronger demand for formal financing for housing-related needs.

The increase comes as households continue to face significant financial pressure from rising construction costs, property prices and other living expenses. For many Nigerians, access to bank financing can provide an alternative to paying the full cost of a property or construction project upfront.

The CBN report also recorded broader growth in secured lending. Overall demand for secured credit increased to 15.1 index points, while demand for corporate lending reached 15.2 index points.

Small businesses recorded one of the strongest increases in demand for credit, with lending rising to 26.4 index points. Lending to medium-sized private non-financial companies also increased to 25.5 index points, while credit to large private non-financial companies rose to 8.9 index points.

Consumer lending also strengthened during the period. The CBN reported that consumer loans to households increased to 11.2 index points, while household overdrafts and personal loans rose to 7.9 index points. Credit card lending, however, declined to -2.0 index points.

The improvement was not limited to demand. The report indicated that banks experienced lower default rates across secured and unsecured lending, while repayment performance also improved among small businesses and various categories of private companies.

The rise in housing credit demand could be significant for Nigeria’s housing market. Mortgage finance remains an important component of any effort to expand homeownership, particularly where property prices are too high for households to rely solely on personal savings.

However, stronger demand for housing loans does not necessarily mean that housing has become more affordable. Higher borrowing costs can still limit access to mortgages, while the underlying cost of land, construction materials and property development continues to influence the final price of homes.

The latest CBN figures therefore point to two developments happening at the same time. Nigerians are increasingly seeking formal credit to meet their housing needs, while the affordability challenge continues to make access to suitable housing difficult for many households.

For Nigeria’s housing sector, the long-term impact will depend not only on the availability of credit but also on whether financing becomes affordable enough for more households to qualify and whether increased lending translates into greater housing supply.

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The Nigeria Deposit Insurance Corporation (NDIC) has commenced the payment of insured deposits to customers of 46 microfinance banks (MFBs) whose operating licences were recently revoked by the Central Bank of Nigeria (CBN). The move is part of the corporation’s statutory responsibility to protect depositors and ensure confidence in Nigeria’s financial system.

According to the NDIC, eligible depositors are receiving their insured deposits through an automated payment process linked to their Bank Verification Numbers (BVNs) and alternative bank accounts. The corporation explained that this approach is intended to speed up reimbursements and reduce the need for customers to visit its offices physically.

The corporation also disclosed that it has intensified efforts to recover outstanding loans and dispose of the assets of the failed institutions. These recoveries are expected to fund additional payments to depositors whose account balances exceeded the maximum insured limit provided under the NDIC Act.

The 46 microfinance banks lost their licences after the CBN determined that they no longer met the regulatory requirements for continued operation. Following the revocation, the NDIC automatically assumed the role of liquidator, taking responsibility for closing the institutions, verifying claims, reimbursing depositors, and managing the liquidation process in accordance with the law.

The NDIC urged affected customers to cooperate during the claims process and ensure that their banking information is accurate to facilitate prompt payment. It also warned members of the public against carrying out transactions with the affected institutions or interfering with their records and assets, noting that such actions could attract legal sanctions.

Financial analysts said the prompt settlement of insured deposits is critical to maintaining confidence in Nigeria’s banking system, particularly within the microfinance sector, which provides financial services to millions of small businesses, traders, and low-income households. They noted that an effective deposit insurance system helps protect savers while reinforcing financial stability.

Stakeholders also believe that the orderly liquidation of failed financial institutions demonstrates the effectiveness of Nigeria’s financial safety framework. They stressed that strong regulatory oversight, prudent risk management, and prompt depositor protection remain essential to safeguarding public trust and ensuring the resilience of the country’s banking sector.

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The Nigerian naira recorded gains against the United States dollar on Wednesday, appreciating in both the official and parallel foreign exchange markets.

At the Nigerian Foreign Exchange Market (NFEM), the naira strengthened to N1,369 per dollar, improving from N1,376/$ recorded on Tuesday, according to data released by the Central Bank of Nigeria (CBN).

The development represents a N7 appreciation in the official exchange rate.

In the parallel market, the local currency also appreciated, trading at N1,385 per dollar, compared to N1,390/$ on Tuesday.

Despite the gains in both markets, the exchange rate gap between the official and parallel markets widened slightly to N16 per dollar, up from N14 recorded the previous day.

Meanwhile, trading activity at the official foreign exchange market declined significantly, with interbank turnover dropping by 66.5 per cent to N90.3 million, down from N269.9 million recorded on Tuesday.

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The Central Bank of Nigeria (CBN) has revoked the operating licences of 46 microfinance banks across the country over their failure to meet key regulatory requirements for continued operation.

The apex bank announced the decision in a statement issued by its Acting Director of Corporate Communications, Sidi-Ali Hakama, stating that the revocation took effect from July 1, 2026.

According to the CBN, the action was approved by Governor Olayemi Cardoso in accordance with Sections 12 and 13 of the Banks and Other Financial Institutions Act (BOFIA), 2020.

The regulator explained that the affected institutions failed to satisfy critical conditions required of licensed financial institutions, prompting the withdrawal of their licences.

The CBN said the affected banks were found to have committed one or more regulatory infractions, including inadequate assets to meet liabilities, prolonged inactivity, closure of operations without regulatory approval, failure to commence business within 12 months of licence issuance, and inability to maintain the minimum capital requirement prescribed by law.

“The revocation of the licences is part of the Bank’s ongoing efforts to safeguard the stability of the financial sector, protect depositors and ensure that licensed institutions comply with current laws and regulatory requirements,” the statement said.

The apex bank reiterated its commitment to maintaining a safe, sound and resilient financial system through strict supervision and enforcement of regulatory standards.

“The Central Bank of Nigeria remains committed to promoting a safe, sound and resilient financial system and will continue to take appropriate supervisory and regulatory actions where necessary to maintain public confidence in the Nigerian financial system,” it added.

Among the affected institutions are Minji-Se Churchill Microfinance Bank (Rivers State), Merchant Microfinance Bank (Abia State), Gold Microfinance Bank (Lagos State), Crystabel Microfinance Bank (Bayelsa State), Creditville Microfinance Bank (Lagos State), OurPass Microfinance Bank (Ondo State), Entrepreneur Microfinance Bank (Lagos State) and Avantus Microfinance Bank (Osun State).

A significant number of the affected institutions are based in Kano State, including Zain Microfinance Bank, Bompai Microfinance Bank, Ajwa Microfinance Bank, NOW NOW Digital Microfinance Bank, Minjibir Microfinance Bank, Shanono Microfinance Bank, Sumaila Microfinance Bank, Rimin Gado Microfinance Bank, Sycamore Microfinance Bank, Tofa Microfinance Bank, Kanopoly Microfinance Bank, Bellbank Microfinance Bank and Esteem Microfinance Bank.

Industry analysts say the move reflects the CBN’s determination to strengthen regulatory compliance, improve financial sector stability and eliminate weak institutions that pose risks to depositors and the broader banking ecosystem.

The development marks one of the largest single licence revocations in the microfinance banking sector in recent years as the regulator intensifies efforts to sanitise Nigeria’s financial services industry.

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The Central Bank of Nigeria’s (CBN) monetary policy decisions continue to shape financial market conditions, as the apex bank maintains a tight stance aimed at stabilising the naira while inadvertently slowing credit expansion and business growth.

Although exchange rate stability remains a key priority, analysts say the prolonged high-interest-rate environment is creating significant pressure on corporate lending and economic activity.

CBN Holds Rates at 26.5% Amid Inflation Concerns

Following its Monetary Policy Committee (MPC) meeting, the CBN maintained the Monetary Policy Rate (MPR) at 26.50 percent, signalling a pause in its aggressive rate-hiking cycle.

Investment analysts at Meristem Securities Limited warn that this decision reinforces a “higher-for-longer” interest rate environment, which will continue to restrict access to credit across sectors of the economy.

Credit Conditions Remain Tight for Businesses and Households

According to analysts, the elevated interest rate level is making borrowing increasingly expensive for both businesses and individuals.

Many firms are now delaying expansion plans, capital projects, and operational investments due to high financing costs.

Households are also reducing borrowing, especially for discretionary spending, as loan repayments become less affordable.

Meristem analysts noted that:

“High cost of borrowing is expected to keep credit creation relatively weak as both lenders and borrowers remain cautious amid still-tight financial conditions.”

Banks Shift Focus to Treasury Income

While the tight monetary environment is slowing lending, it is benefiting commercial banks in other ways.

Banks are expected to record stronger earnings from:

• Government securities
• Treasury bills
• Repriced interest-bearing assets

However, analysts say credit growth will remain weak as risk-averse lending behaviour continues across the financial system.

This means bank profitability is likely to rely more on fixed-income investments than traditional loan expansion.

CBN Defends Tight Monetary Policy

CBN Governor Olayemi Cardoso defended the decision to maintain a restrictive monetary stance, saying exchange rate stability remains essential to controlling inflation.

He noted that recent inflation increases were driven largely by external shocks and described them as temporary.

According to him:

“The centrepiece of our toolkit is ensuring that our foreign exchange rate remains stable.”

Liquidity Flows Into Government Securities

With limited credit expansion in the real economy, excess liquidity is increasingly moving into safer government instruments such as Treasury bills and bonds.

Analysts expect continued strong demand at bond auctions, even as yields remain elevated due to inflationary pressures and government borrowing needs.

Outlook for Investors

Market analysts advise investors to adopt a cautious and selective strategy in the current environment.

They recommend focusing on:

• Strong, defensive stocks
• Companies with stable earnings
• Firms with reliable dividend payouts

In fixed-income markets, continued demand for government securities is expected to support liquidity flow.

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The Economic and Financial Crimes Commission (EFCC) on Monday tendered several newspaper publications as evidence in the ongoing trial of former Central Bank of Nigeria Governor, Godwin Emefiele, over allegations linked to the Naira redesign policy.

The documents were presented at the High Court of the Federal Capital Territory as part of the prosecution’s effort to support claims of alleged disobedience to lawful directives and actions said to have caused injury to the nation.

EFCC Presents Certified Newspaper Exhibits

The EFCC submitted the newspaper materials through a subpoenaed witness, Jegede Oluwasegun, an official of the National Library of Nigeria.

The publications tendered included copies of Punch, ThisDay, Vanguard, Daily Sun, and The Nation newspapers, along with certification receipts issued by the National Library.

The documents were admitted as exhibits without objection from the defence counsel.

Allegations Against Emefiele

Emefiele is facing a four-count charge bordering on alleged disobedience to lawful directives and acts said to have caused public injury.

According to the EFCC, between October 19, 2022 and March 5, 2023, the former CBN governor allegedly approved the printing of 375,520,000 pieces of redesigned N1,000 notes at a cost of over N11 billion without proper approvals from the CBN Board and the President.

The commission said the alleged actions violated Section 19 of the Central Bank of Nigeria Act and were punishable under the Penal Code.

Witness Testimony In Court

During proceedings, prosecution witness Jegede Oluwasegun, led in evidence by Rotimi Oyedepo (SAN), explained his role as a certifying officer at the National Library.

Under cross-examination, the witness admitted he was not the author of the newspaper content and could not verify its accuracy.

“I cannot 100 per cent say the content of the papers is right. I am not the author,” he told the court.

Defence Also Tenders Document

Counsel to the defendant, Olalekan Ojo (SAN), later tendered a ThisDay publication dated January 31, 2023, which was also admitted in evidence without objection from the prosecution.

Court Adjourns Hearing

Justice Maryanne Anenih adjourned the matter to May 12 for continuation of trial proceedings.

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