Abuja, Nigeria – The Centre for the Promotion of Private Enterprise (CPPE) warns that Nigeria’s banking recapitalisation has not translated into stronger lending for the real economy. The think tank says credit remains skewed toward short-term and low-risk loans, leaving productive sectors underfunded.
Okay News reports that CPPE Chief Executive Officer Muda Yusuf praised the Central Bank of Nigeria for a smooth recapitalisation but said financial intermediation is still weak. Private sector credit stood at 17 percent of GDP in 2025, below the sub-Saharan African average of 25 percent and the 34 percent benchmark for lower-middle-income countries.
CPPE highlighted that about 55 percent of bank lending matures in less than one year while only 25 percent exceeds three years. This structure limits financing for capital-intensive sectors such as manufacturing, agriculture, infrastructure, and real estate.
The think tank noted that small and medium enterprises receive just 1 percent of total bank credit, far below the regional average of 5 percent. CPPE said this poor credit allocation undermines job creation and economic diversification.
CPPE identified several barriers to better credit allocation, including high government borrowing crowding out private credit, tight monetary policy, stringent collateral rules, and incentives favoring short-term investments. The group urged policymakers to shift focus from capital adequacy to improving lending practices and risk frameworks.
The Central Bank of Nigeria said 32 banks met revised capital requirements and that banks mobilised about 4.61 trillion naira in fresh capital under the recapitalisation programme, roughly 3.41 billion US dollars at an exchange rate of 1,353.85 naira per dollar. CPPE called for targeted reforms to ensure that stronger bank balance sheets support long-term productive lending.
 warns that Nigeria’s banking recapitalisation has not translated into stronger lending for the real economy.){kind=link}