The Central Bank of Nigeria (CBN) has revealed a substantial reduction in banks' loans to the private sector, amounting to N71.21 trillion in March. This marks a notable decline of 11.93 percent or N9.65 trillion from February's figure of N80.86 trillion, as reported in the CBN's money and credit data.

However, on a year-on-year basis, there was a significant increase of 65.57 percent compared to March 2023's N43.01 trillion.

Concurrently, credit to the government also witnessed a decline to N19.59 trillion in March from February's N33.93 trillion, representing a month-on-month decrease of 42 percent. Yet, on a yearly basis, credit to the government rose by 28.8 percent.

These shifts follow CBN's continued monetary tightening efforts, including consecutive interest rate hikes since May 2022 and a recent downward revision of the loan-to-deposit ratio (LDR) from 65 percent to 50 percent in April. The LDR adjustment aims to regulate banks' liquidity, impacting their ability to extend loans to both businesses and individuals.