Post by Arise News (@arisenews)

The Alliance for Economic Research and Ethics (AERE) has described Nigeria’s ₦14 trillion decline in private sector lending as an economic emergency, warning that businesses, manufacturers and SMEs are being starved of credit despite rising liquidity in the banking sector. In its report, “The ₦14 Trillion Vanishing Act,” AERE noted that while money supply expanded and banks strengthened their balance sheets through recapitalisation, lending to the private sector contracted sharply. The think tank said SMEs, which contribute about 50% of GDP and employ over 80% of Nigeria’s workforce, receive just 1% of total bank credit, leaving an estimated ₦48 trillion financing gap. It also blamed rising government borrowing for crowding out productive investment, as banks increasingly favour low-risk treasury instruments over business loans. AERE called for stronger lending mandates, expanded credit guarantees and targeted support for manufacturing, agriculture and SMEs.

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