Credit to FG Declines 45% to N5.16 trn 

Credit to the government fell for the second consecutive months by 45 percent to N5.16 trillion in November 2023 from N9.39 trillion in October in 2024.

Data obtained from the Central Bank of Nigeria, CBN, Money and Credit Statistics for the review period showed that credit to the government had declined by 72.4 percent in October to N9.39 trillion from N34 trillion in September 2023.

Meanwhile, credit to the private sector fell MoM, by 6.0 percent to N59.7 trillion in November 2022 from N63.5 trillion in October 2023.

Consequently, the Net Domestic Credit (NDC) to the economy fell for the second consecutive month to N64.9 trillion in November 2023, representing an 11 percent (MoM) decline from N72.9 trillion in October 2023.

In the 2024 financial year outlook for the banking sector, analysts at CardinalStone Research noted that banks will likely retain restrictive credit lending policies this year.

“The noticeable increase in banks’ 9M’23 risk assets was driven by a 38.7 percent surge in loans which surpassed last year’s growth of 18.2 percent and the 5-year Compound Annual Growth Rate, CAGR, of 14.6 percent.

“This credit growth was largely propelled by the impact of currency devaluation on banks’ foreign currency loans.

“To our minds, 2024 is likely to be a year of correction for credit growth due to the sustained macroeconomic issues in the country.

“Banks are likely to retain restrictive credit lending policies, targeting sectors and obligors that are relatively more creditworthy.

“Hence, we expect financial year (FY’24) loan growth to revert to a 4-year mean of 19.9 percent”. Currency outside banks hits N3.08 trn.

Meanwhile, the CBN data also showed that currency outside banks reached N3.08 trillion in November 2023, representing a 14.5 percent MoM increase from N2.69 trillion in October.

Similarly, currency in circulation increased MoM by 11 percent to N3.34 trillion in November from N3.01 trillion in October.