Bank credit to govt, private sector grows 34% YoY
By Jeph Ajobaju, Chief Copy Editor
Bank credit to the economy rose 34 per cent year-on-year (YoY) from N46.9 trillion in the third quarter of 2021 (Q3 2021) to N63.3 trillion in Q3 2022, according to the latest data released by the Central Bank of Nigeria (CBN).
CBN Money and Credit Statistics show the N63.3 trillion comprises government borrowing of N22.8 trillion and private sector borrowing of N40.5 trillion.
Government loans from banks grew 75 per cent YoY and private sector loans 19 per cent.
CBN data also shows currency-in-circulation (CiC) rose 12.6 per cent YoY from N2.84 trillion in September 2021 to N3.2 trillion in September 2022, per Vanguard.
The Senate last month approved N8.4 trillion ($19 billion) new loans for 2023 to help fund an estimated federal government budget shortfall of N10.5 trillion.
The World Bank warned the new loans would add to Nigeria’s rising debt service costs, which exceeded revenue in the first four months of this year to April (4M 2022) and could reach 102 per cent of government income by December 2022.
Finance Minister Zainab Ahmed said the proposed 2023 budget deficit may rise to N12.4 trillion, if fuel subsidy continues beyond June 2023.
This would compel the government to borrow even more, with revenues expected at N8.46 trillion, less than half the proposed 2023 expenditure of N19.76 trillion.
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Banks grant N61.2tr loans to raise economic activities
Credit granted by banks for economic activities jumped 2.17 per cent to N61.2 trillion in August from N59.9 trillion in July, according to CBN Money and Credit data.
Currency-in-circulation rose 0.9 per cent to N3.24 trillion in August from N3.21 trillion in July.
The data shows the N61.2 trillion credit comprised N21 trillion granted the government, which grew 4.4 per cent from N20.1 trillion in July.
A total N40.2 trillion was approved for the private sector, a 1.0 per cent month-on-month (MoM) rise above N39.8 trillion in July.
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