Nigeria experts call for mandatory bank lending to productive sectors

Economic experts are advocating for mandatory credit allocation policies in Nigeria to compel commercial banks to direct more lending toward productive sectors such as agriculture, manufacturing, and construction. Proponents argue that this shift is necessary to accelerate job creation and ensure economic reforms benefit the broader population.

Currently, many Nigerian banks prefer low-risk assets like government securities and treasury bills, a trend that limits affordable credit for industrial and food security sectors. Chidozie David Okonkwo, CEO of ZINNC, stated that banks may need to be “forced to lend” through policy mandates to prioritize productive investments over consumer credit.

However, experts note that increasing credit alone may be insufficient without addressing structural constraints. High inflation, currency volatility, unreliable power supplies, and rising electricity costs continue to increase the risk profile for loans to the manufacturing and agricultural sectors.