Nigeria consumer credit falls to N3.8 trillion, first decline in six years

Tightening monetary policy is choking off lending growth as inflation remains sticky, raising questions about the central bank's dual mandate.

By Handelsavisen Newsroom · Automated 2026-07-30 06:37 UTC · 1 min read

Consumer credit in Nigeria has contracted to N3.8 trillion, marking the first decline in six years and signaling that aggressive interest rate hikes are stifling economic activity more effectively than they are curbing prices.

The drop in lending volumes underscores the growing tension within the Central Bank of Nigeria’s policy framework.

93% in March 2026, the collateral damage to credit availability is becoming evident.

While the bank has raised rates to combat inflation, which accelerated to 15.93% in March 2026, the collateral damage to credit availability is becoming evident.

The contraction suggests that borrowing costs have reached a level where both consumers and businesses are retreating from debt, regardless of the inflationary backdrop.

This development complicates the outlook for the West African economy.

With the manufacturing sector already grappling with policy inconsistency, overlapping regulations, and multiple taxation burdens, the withdrawal of consumer credit adds another layer of headwinds.