Even if broader liquidity indicators and external buffers are strengthening, Nigeria’s private sector credit landscape is beginning to show symptoms of strain due to the Central Bank of Nigeria’s (CBN) extended tight monetary policy.

A system trapped between macroeconomic stabilization and the pressing need to release growth-supporting credit is shown by recent CBN statistics, laying the groundwork for a potentially significant change in 2026.

The CBN reports that in November 2025, private sector credit extended (PSCE) increased slightly by 0.3 percent month over month to N74.6 trillion.

While the slight increase points to some resilience, the overall picture is less encouraging: PSCE fell by 2% year over year, highlighting the dampening effect of high interest rates and tight liquidity circumstances on borrowing and investment.

The CBN’s aggressive policy approach, which was used to control inflation, stabilize the naira, and rebuild trust in the macroeconomic system, is primarily responsible for this moderation.

The cost of financing has increased due to higher policy rates and stricter liquidity requirements, forcing banks to be more selective when creating credit and causing companies to postpone expansion plans.

A Wide-Ranging Credit System Under Stress

Crucially, the PSCE data includes lending from deposit money banks (DMBs) as well as the whole banking and credit ecosystem in Nigeria. It consists of microfinance banks, non-interest banks, and state-owned development finance institutions like the Bank of India. Nevertheless, DMBs continue to have a strong position, accounting for over 69% of all private sector loans.

On the other hand, a narrower lens presents a somewhat different picture. As of the end of June 2025, total lending by deposit money banks was N58.2 trillion, according to data from the CBN’s Quarterly Statistical Bulletin (QSB) for the second quarter of 2025. This represents a moderate 4 percent gain year over year.

There appears to be a difference of almost N16.5 trillion between this figure and the overall PSCE total.

While timing discrepancies between datasets may account for some of this discrepancy, analysts point out that a sizable amount represents credit provided by non-DMB organizations, such as development banks, microfinance lenders, and other specialized players, whose role has subtly grown as traditional banks exercise caution.

This changing makeup indicates that although the banking system is still liquid, policy restrictions, worries about asset quality, and the need to protect capital in a volatile operating environment have limited risk appetite, particularly among big commercial lenders.

Credit Lags, Liquidity Increases

Ironically, strong expansion in important monetary aggregates is occurring concurrently with the downturn in private sector credit. Both the narrow money supply (M2) and the broad money supply (M3) increased by 13% annually to roughly N122.9 trillion and N123.0 trillion, respectively, indicating sufficient liquidity in the system.

The increase in net foreign assets, which increased by 115% year over year to N37.4 trillion, is even more remarkable.

Due to robust diaspora remittances and robust foreign portfolio inflows after foreign currency market reforms, Nigeria’s external cash situation has significantly improved, as evidenced by this fast expansion.

This tendency is further demonstrated by Nigeria’s external reserves, which increased by $4.6 billion annually to $45.5 billion in full 2025.

The CBN is now better equipped to handle external shocks, support the naira, and keep foreign investors confident thanks to the reserve build-up.

However, transmission to private sector credit has been subdued despite these favorable liquidity signals, which serves as a warning that lending is not guaranteed by liquidity alone. Credit expansion is still largely determined by price stability, risk perception, and policy clarity.

Government Credit Conveys a Different Message

The picture of credit extended to the government is not entirely clear. Lending to the public sector fell precipitously by 33% year over year as a result of initiatives to stop deficit monetization and lessen the crowding-out of private borrowers. However, government credit increased by 6% to N26.4 trillion on a monthly basis, indicating sporadic funding need in the face of budgetary constraints.

Many people view the yearly decrease in government borrowing from the domestic banking system as a beneficial structural change. It makes room for more private sector lending, at least in principle, by reducing competition for bank funds. However, because of current monetary constraint and cautious bank behavior, the gains have not yet fully materialized in practice.

Companies Are Squeezed

The consequences are real for traders, manufacturers, and service providers. High lending rates have limited working capital funding, tightened margins, and postponed capital expenditures, especially for small and medium-sized businesses.

Internal cash flows and alternative financing sources, such as development finance organizations and unofficial credit markets, are becoming more and more important to many businesses.

Economists contend that if macroeconomic stability is maintained, the long-term benefits could be substantial even while the short-term suffering is real.

A healthier credit cycle would eventually result from lower risk premiums, a more stable currency rate, and stronger external buffers.

2026: A Credit Turning Point?

Anticipations for a less restrictive domestic policy environment in 2026 are growing. Improving business conditions and a lower inflation outlook will probably allow the CBN to reassess its position, possibly loosening policy rates and liquidity restrictions.

In particular, deposit money banks, which are anticipated to emerge from the ongoing recapitalization process with stronger balance sheets and increased risk-bearing capacity, could release pent-up demand for credit as a result of this change.

Banks with adequate capital are better able to fund large-scale projects, offer longer-term loans, and increase credit penetration in important economic sectors.

According to analysts, private sector credit growth might significantly resume in 2026, supporting output expansion, job creation, and a wider economic recovery, if monetary easing is carefully timed and anchored on protracted deflation.

Stability and Growth in Balance

In the end, the most recent figures emphasize the challenging balancing act Nigeria’s monetary authorities must perform in order to maintain macroeconomic stability without restricting the credit required to spur growth.

The slowdown in private sector credit serves as a reminder that stabilization has a price, but it also shows that the groundwork for a longer-lasting expansion is being established.

The challenge will be to make sure that Nigeria’s increasing liquidity, improved external position, and higher banks capital transfer into real-economy lending as inflation pressures subside and confidence recovers.

The greatest economy in Africa may start a new, more sustainable loan cycle in 2026 if that transmission mechanism works.

…insist on probe of FCT judge for granting order without jurisdiction

A civil society group, Africa Centre for Good Governance and Corruption Free Communities has accused the plaintiff in a Lagos property dispute, Mr Henry Ugonna Orabuchi, of spreading false narrative in the case.

The group, in a press statement signed by its Convener, Comrade Temitope Olubunmi Joseph, said for the avoidance of doubt, the Suit No. is: FCT/HC/CV/4636/2025 and the parties in the case are Henry Ugonna Orabuchi Vs Nigeria Police Force and Others.

“The case was filed by the plaintiff for the enforcement of his Fundamental Rights and claims over property in Lagos.

“All we are saying is that Mr Orabuchi should stop spreading false narrating. The order was issued by a High Court of the Federal Capital Territory, which clearly, does not have jurisdiction and not the Federal High Court, Abuja”, Joseph said.

In a press statement said to have been issued by Mr Orabuchi, specifically, published by Linda Ikeji Blog, on January 5, 2026, Mr Orabuchi ascribed the FCT High Court order to Federal High Court, Abuja.

He said in the press statement on Linda Ikeji Blog, “Ironically, Mr. Emecheta now raises jurisdictional arguments, forgetting that he was the first to approach Abuja, while Mr. Orabuchi only sought the protection of the Federal High Court Abuja after persistent harassment and threats, despite clear IGP directives.”

The group, in reacting to the false narrative, called on Mr Orabuchi to desist from distorting facts of the case, insisting that the High Ciurt of the FCT has no powers to make such order over a land situated in Lagos.

The group once again, called on the National Judicial Council, NJC, to probe the order of the court, insisting that the FCT High Court has no such power to make the order.

“We are calling on Mr Orabuchi to stop making false claim and stop misleading the public with false information. Check your records well, in case you fail to look at the documents in your possession before coming to the public with misleading information, it was the High Court of the Federal Capital Territory, before Justice Othman Musa, that made the order to seal the property located at the back of Plot No A Block 12, Lekki Peninsula Scheme, Lagos State, and not Federal High Court, Abuja.

“As a friend of the court, we will not watch while you distort the facts of the case and mislead the public with false narrative. We are watching with very keen interest and we shall ensure that justice is served in this matter, no matter how long it takes.

“The FCT High Court does not have jurisdiction over a land matter involving property located in Lagos State. In Nigeria, the jurisdiction for land disputes is primarily determined by the physical location of the land or where the cause of action arose. The High Court of a state (or the FCT High Court for land in the FCT) has exclusive original jurisdiction to hear and determine disputes related to land within its own specific territorial boundaries, as provided by the Land Use Act and the Constitution. The FCT High Court’s jurisdiction is generally limited to matters and properties within the geographical area of the Federal Capital Territory, Abuja. It lacks the competence to adjudicate over matters arising from or connected to another state, such as Lagos. Therefore, any lawsuit concerning land in Lagos must be instituted in the High Court of Lagos State, specifically within the appropriate judicial division where the property is situated.
“Once again, we are calling on the NJC and insisting that a probe should be launched into the order of the court. We simply cannot cease to wonder why a state high court will issue an Exparte order over a land matter in another state because obviously, the FCT High Court is equivalent to a state high court”, the group said.

Last week, the group called for probe into the order of the court.

The group, in a statement wondered why the judge overreached his bounds by issuing an order to seal up a property in Lagos, while sitting as a judge in Abuja.

Convener of the group, Comrade Joseph, called for thorough probe and possible sanction, if found wanting and said it had watched with keen interest, proceedings in a property dispute located in Lagos State before the FCT high court.

He said, “We have watched with keen interest proceedings in Suit No. FCT/HC/CV/4636/2025, a case for the enforcement of Fundamental Rights instituted by Mr. Henry Ugonna Orabuchi Vs Nigeria Police Force and Others.

“Ordinarily, we, as an organisation and stakeholder in the Nigeria project are not supposed to dabble into the matter because it is before a competent court of law and may amount to subjudice but we feel a responsibility is placed on us to draw the attention of the leadership of the judiciary, particularly, the Chief Justice of Nigeria, Honourable Justice Kudirat Kelere-Ekun and the National Judicil Council, NJC, to events and occurrence that are not going on well in our courts, particularly, when the courts are being used to take away the rights of ordinary Nigerians”.

According to him, the plaintiff in the matter, Mr. Orabuchi approached the FCT High Court seeking an enforcement of his fundamental rights and asking the court to stop the Nigeria Police from inviting him over a property dispute in Lagos State.

Comrade Joseph said, “Mr. Elvis Emecheta, a Lagos businessman and owner of the disputed property reported the unlawful activities of Mr. Orabuchi, who resorted to self help by forcefully occupying the property and destroying parts of it.

“Mr. Orabuchi was invited by the police to state his own side of the story, rather than honour police invitation, he curiously ran to the FCT High court to stop the police from doing their job by inviting him.

“He claimed that he purchased 3,000 square meters of reclaimed land at the back of the above address from the Landlord, Mr. Emecheta Elvis Eze, which has nothing to do with the premises where the affected business entities are located.
Mr. Orabuchi filed the suit to shield him from honouring invitation of the Nigeria Police Force, following a Petition against him by Mr. Emecheta, alleging conduct that amounts to criminal trespass, damage to property and threat to life.

“Mr. Orabuchi, in the fundamental rights enforcement suit filed by his Counsel, Chikaosolu Ojukwu, SAN, said the police invitation infringes on his fundamental rights and is aimed at compelling him into relinquishing his lawful proprietary and contractual rights over the 3,000square meters of reclaimed land behind the sealed up property.

“The court presided over by Justice Othman Musa granted the order on on November 24, 2025 to seal and secure the entire property, including the reclaimed land at the back of the property measuring 3,000 square meters
He also ordered the immediate stoppage of all construction works, activities, actions, or steps on the said property while ensuring that no person, authority, or entity howsoever described is permitted access to or entry upon the property pending the hearing and determination of the substantive suit pending before the court.”

“Following the Exparte order of the court which was supposed to have been vacated, having elapsed, on December 30, 2025, all the occupants of the property and their workers were forcefully chased out of their business premises and the property was sealed up by people who introduced themselves as officers of the FCT High Court, from Abuja.

“All efforts by the various business owners to explain to the FCT Court officials that their business premises is different from the 3,000square meters of the reclaimed land behind it was rebuffed as they were sent out of their business premises without any notice or justification”.

The group demanded probe into the activities of the FCT high Court judge, saying he clearly lacked the jurisdiction to issue the Exparte Order to seal up a property in Lagos. According to the group, only a Lagos court has such powers.

“We, as an organisation are demanding a probe into the activities of Justice Othman Musa, regarding the case and possible sanction. We cannot explain a situation where a judge of the High Court of the Federal Capital Territory, Abuja will give an Exparte order to seal up a property in Lagos, where his jurisdiction does not extend to.

“To us, clearly, the judge does not have the jurisdiction to do that. The disputed property is outside his jurisdiction and should not have made the order he issued. Moreso, the order was made, on November 24, 2025 and should have elapsed, yet, it was not vacated. We are calling on relevant bodies in the Judiciary to call Justice Othman to order and we make bold to say that, if this trend continues in the case, we will have no option than to write a FORMAL PETITION to the NJC to report the Honourable judge for sanction.

“If the action of Justice Othman Musa is left unchecked, other judges may want to do the same, therefore, we are calling, on the leadership of the judiciary to call Justice Musa to order to protect the integrity and sanctity of the Judiciary.

“We believe the institution of this case in FCT High Court Abuja and the grant of the Exparte Order is a calculated scheme aimed at causing mischief and hardship on the Landlord of the Premises and the innocent occupants who have been deprived of access to their business premises. The Business owners are not parties to the alleged agreement between Mr. Henry Ugonna Orabuchi, and Mr. Elvis Emecheta, over the 3,000 square meters of the reclaimed land behind their business premises and are not parties to the fundamental rights case before the Abuja Court. The judiciary should not be used to abuse its own process and to aid those with means to oppress innocent citizens.”