In the past year, Nigeria’s banking sector experienced a significant 70.3 percent increase in lending to private sectors, with the oil & gas and manufacturing sectors leading the way, as reported by BusinessDay. According to data from the Central Bank of Nigeria, credit to the private sector rose to N463.74 trillion in the first nine months of the year, up from N272.2 trillion in the same period of the previous year. This data gives insight into how loans are distributed across different sectors of the economy.
Despite these increases, Nigeria’s credit to GDP ratio stands at 33.3 percent as of August 2024, which is lower than South Africa’s ratio of 92.4 percent. The growth in domestic credit, particularly to the private sector, is attributed to factors like banks’ FX revaluation gains, loan-to-deposit ratio, and CBN policies aimed at stimulating growth in the real economy.
The oil & gas sector received the highest bank credit of N111.5 trillion, up by 112.3 percent, while the manufacturing sector received N85.8 trillion, a 51 percent increase. Other sectors that saw significant increases in bank credit include finance, insurance, and capital markets, the general sector, oil & gas services, trade/general commerce, government, agriculture, construction, and information & communication.
These developments highlight the diverse range of lending activities taking place in various economic sectors within Nigeria’s banking industry.
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