Government Loans From Deposit Money Banks Rise to N954.27bn

The total debt incurred by the Federal, States and Local governments to the Nigerian deposit money banks stood at N954.27 billion by the end of March.

The Central Bank of Nigeria disclosed this in its report, ‘Quarterly Statistical Bulletin-Commercial and Merchant Bank Accounts’ released on Friday.

A break down of the report revealed that the federal government borrowed N93.56 billion from the nation’s banks as of March ending while the states and governments’ loan stood at N860.7 billion during the period under review.

However, the loans procured by the Federal Government reduced from N132.14 billion in 2018 to N92.22 billion by the end of 2019 while the states and local government’s loans actually increased to N885.49 billion, up from N758.69 billion.

The total loans from the nation’s banking sector to the economy rose to N17.5 trillion in March and N18.6 trillion by the end of April, according to the report.

Speaking on lending, Godwin Emefiele, Governor, CBN, emphasised the importance of lending to the real sector on the economy as a whole.

He said, “Again, the observed growth in credit illustrates the continued potency of the bank’s Loan-to-Deposit Ratio policy and the need to sustain credit flows to the private sector, especially at this critical time when the economy needs to indefatigably support its productive machinery.

“I note the continued moderation of non-performing loans from 11 per cent in April 2019 to 6.6 per cent in April 2020 amidst growing private sector credits.

“This underlined our continued drive to de-risk lending.

“I re-echo the imperatives of enhanced credit flows to strategic and high-impact private sector ventures through an effective collaboration of all stakeholders, especially on the backdrop of the imminent economic downturn.”