The Central Bank of Nigeria has ruled out a return to large-scale intervention lending programmes, marking a decisive shift away from policies that defined much of the country’s monetary strategy over the past decade.
Speaking on the legacy of the Bank’s intervention schemes, CBN Governor Olayemi Cardoso disclosed that approximately ₦4.69 trillion in loans issued under previous programmes remains unpaid. The figure represents about 43% of all intervention funds disbursed since 2010, underscoring what the apex bank now views as a major structural weakness in its past development finance model.
Cardoso described the outstanding debt burden as a significant strain on the CBN’s balance sheet, warning that prolonged reliance on subsidised lending had created “moral hazard” across parts of the economy. In financial markets, moral hazard refers to situations where borrowers take excessive risks because they believe losses will ultimately be absorbed by the government or central bank.
The governor’s remarks reinforce the CBN’s broader pivot toward orthodox monetary policy under the current administration. Since taking office, Cardoso has prioritised inflation control, exchange-rate transparency, and monetary tightening after years of heavy market intervention and multiple foreign exchange windows.
According to the CBN, its direct participation in the foreign exchange market has now declined sharply, accounting for only about 1.2% to 1.3% of total market turnover. The move reflects an effort to deepen liquidity and allow market forces to play a larger role in price discovery within Nigeria’s currency market.
Analysts say the policy shift signals a deeper institutional reset. For years, the central bank financed sectors ranging from agriculture to manufacturing through targeted intervention schemes intended to stimulate growth and reduce import dependence. Critics, however, argued that the programmes blurred the line between monetary policy and fiscal policy, weakened transparency, and exposed the CBN to mounting credit risks.
Rather than return to direct lending, the Bank said it would instead focus on “de-risking” strategic sectors through partnerships with private investors and stronger Development Finance Institutions (DFIs). DFIs are specialised financial institutions designed to provide long-term capital for sectors underserved by commercial banks.
The strategy could reshape credit allocation across Nigeria’s economy. While businesses that previously relied on concessionary CBN funding may face tighter financing conditions, economists believe the transition could strengthen market discipline and improve capital efficiency over the long term.
The policy stance also comes as Nigeria continues to battle elevated inflation, currency volatility, and weak investor confidence, pressures that have intensified demands for credible and predictable monetary management.
