- Banks’ Credit to Private Sector Surges 2.65% in Q2, 2019
The total credit provided by Nigerian banks to the private sector rose by 2.65 percent in the second quarter, according to the recent data from the National Bureau of Statistics (NBS).
The nation’s banks allocated N15.13 trillion to the private sector in the second quarter, representing an increase of 2.65 percent when compared with the first quarter.
Oil & Gas sector received the most credit during the quarter, the sector was supported with N3.3 trillion or 22 percent of total credit issued, while the manufacturing sector followed with N2.32 trillion or 15.32 percent.
Mining & Quarrying sector received N8.6 million or 0.06 percent in total credit. While the power sector was approved N335.5 billion or 2.22 percent of total credit, agriculture was granted N636.1 billion or 4.20 percent.
The education sector was allocated N60.4 million or 0.40 percent.
The total credit approved is expected to surge in the third and fourth quarters following the Central Bank of Nigeria’s 60 percent loan-to-deposit ratio directive and the new cap limit on banks’ investment in the fixed income market.
In an effort to stimulate growth across key sectors, the central bank continues to pressure deposit money banks to provide more credit for private businesses looking to grow through local production and job creation.
The apex bank recently restricted importers of palm oil, textile materials, cassava and its derivatives and milk from accessing foreign exchange to force them to embrace local production and support the Federal Government job creation initiative.
While experts questioned Nigeria’s readiness for such a move, the apex bank argued that local production would boost economic productivity, ease pressure on the foreign reserves and reduce the unemployment rate.
Nigeria’s unemployment rate rose to 23.1 percent this year, up from 18.8 percent recorded last year as the economy continues to struggle years after the recession.