Nigeria’s banking sector continued to channel a significant portion of its loans to the oil and gas industry in 2025, while lending to the manufacturing sector declined sharply. This trend highlights the growing preference of commercial banks for industries considered more profitable and less risky amid ongoing economic challenges.
Recent data from the Central Bank of Nigeria (CBN) revealed that total credit extended to the oil and gas sector rose substantially during the year. The sector remained one of the largest recipients of bank financing, reflecting its strategic importance to Nigeria’s economy and its strong ability to generate revenue.
The oil and gas industry has long been a major contributor to government earnings, foreign exchange inflows, and national economic growth. As a result, banks often view investments in the sector as relatively secure compared to other industries. Rising global energy demand and improved oil production levels have also strengthened confidence among lenders.
In contrast, the manufacturing sector experienced a decline in access to credit. Many manufacturers continue to struggle with high production costs, unstable power supply, foreign exchange shortages, inflation, and rising interest rates. These challenges have increased operational risks and reduced the ability of some businesses to meet loan obligations.
Industry experts believe that the reduction in manufacturing loans could have wider implications for Nigeria’s economic development. Manufacturing plays a critical role in job creation, industrialisation, and economic diversification. Reduced financing may limit expansion plans, slow production activities, and weaken the sector’s contribution to gross domestic product (GDP).
Several business leaders have expressed concern over the growing imbalance in credit allocation. They argue that while the oil and gas industry remains important, greater support should be provided to sectors that create large numbers of jobs and stimulate local production. According to them, easier access to affordable financing would help manufacturers invest in modern equipment, expand capacity, and improve competitiveness.
Economic analysts also note that banks are increasingly cautious in their lending decisions due to uncertainties in the business environment. Financial institutions are prioritising sectors with stronger cash flows and lower default risks. This strategy helps protect their balance sheets but may reduce funding opportunities for industries facing operational difficulties.
The Federal Government has repeatedly emphasized the importance of strengthening local manufacturing as part of its economic diversification agenda. Various intervention programmes and policy initiatives have been introduced to support businesses, improve infrastructure, and encourage industrial growth. However, stakeholders say more efforts are needed to ensure manufacturers can access the capital required for sustainable expansion.
As Nigeria seeks to reduce dependence on crude oil revenues, experts believe balanced credit distribution across key sectors will be essential. Increased financing for manufacturing, agriculture, technology, and other productive industries could help drive economic resilience and create long-term growth opportunities.
For now, the banking sector’s lending pattern suggests that oil and gas remains the preferred destination for credit, while manufacturers continue to face significant challenges in securing the funding needed to support their operations and future growth.
