Top 10 sectors with highest bank credit in Nigeria as of March 2024
The total banking sector credit to the Nigerian economy more than doubled year-on-year rising to about N53.2 trillion at the end of the first quarter of 2024.
This is according to the latest data from the Central Bank of Nigeria (CBN) showing the banking sector’s lending to different sectors of the economy.
Based on the CBN’s data, there was 76% increase from the N30.3 trillion reported same period in 2023. It also represents a 20% increase from N44.5 trillion recorded at the end of 2023.
However, Nigeria has a low credit to Gross Domestic Product (GDP) ratio of 22%, which is far lower than the 70% recorded in South Africa.
In the first three months of 2024, about N8.7 trillion were borrowed from banks in Nigeria across various sectors.
Below are the top 10 sectors that have the highest bank credit as of March 2024:
#10: Information & Communication
The Information & Communication sector has N1.67 trillion in bank credit, up from N1.28 trillion in March 2023, reflecting a 30.47% increase.
This sector includes telecommunications, IT services, and broadcasting, which are essential for digital connectivity and technological advancement in Nigeria. The sector witnessed a growth of 6.23% in the first quarter of 2024.
However, this marks a marginal decline when compared to the 6.93% growth recorded in the last quarter of 2023. Also, the sector contributed 17.89% to the country’s GDP, making it the second largest contributor to the country’s economy.
This signifies a 0.42%-point increase from the sector’s 17.47% contribution in Q1 2023 and a 1.23%-point increase from its 16.66% contribution in Q4 2023.
#9: Construction
The Construction sector has N1.83 trillion in bank credit, up from N1.16 trillion in March 2023, marking a 57.76% increase.
This sector’s financing is crucial for infrastructure development, including roads, bridges, residential and commercial buildings, contributing to the country’s urbanization and economic growth.
The construction sector in Q1 2024 contracted by 0.29% year-on-year, in contrast with the 37.7% growth posted by the sector in Q1 2023.
#8: Agriculture
Agriculture, a vital sector for Nigeria’s economy, has secured N2.58 trillion in bank credit, increasing from N1.89 trillion in March 2023, which represents a 36.51% increase.
This financing supports farming, livestock, fisheries, and agribusiness, essential for food security and rural development. The sector contributed 21.07% to the GDP, with crop production alone accounting for 19.24% of this figure.
This represents a decrease from the contributions in the first quarter of 2023, which stood at 21.66%, and the fourth quarter of 2023, which stood at 26.11%.
In Q1 2024, the agricultural sector grew by 0.18% year-on-year, up by 1.08%-points from Q1 2023 but down by 1.92%-points from the previous quarter’s growth rate of 2.10%.
#7: Government
The Government sector also received N2.58 trillion in bank credit, slightly down from N2.60 trillion in March 2023, showing a 0.77% decrease.
This credit supports various government activities, including public administration, social services, and infrastructure projects.
#6: Finance, Insurance, and Capital Market
The Finance, Insurance, and Capital Market sector has been credited with N3.41 trillion, up from N2.64 trillion in March 2023, indicating a 29.17% increase.
This sector includes banks, insurance companies, and investment firms, which are pivotal for financial stability and economic development.
The sector’s total contribution reached 6.81%, which was a 1.44 %-point increase from the 5.31% recorded in Q1 2023.
This was also 1.865 points higher than the 4.95% reported in Q4 2023. The sector is also one of the fastest growing in the economy, as it expanded by 31.24% year-on-year in Q1 2024. This marks a 9.87 %-point growth from the 21.37% growth rate posted in Q1 2023.
#5: Trade/General Commerce
Trade and General Commerce have received N3.80 trillion in bank credit, up from N2.33 trillion in March 2023, reflecting a 63.09% increase. This sector encompasses wholesale and retail trade, facilitating the movement of goods and services across the country.
Trade was the third largest contributor to the country’s GDP in Q1 2024 with 15.70%, slightly lower than the 15.97% recorded in the previous year but higher than the 15.50% noted in the fourth quarter of 2023.
During the quarter, the sector grew by 1.23%, which was 0.08%-points lower than the 1.31% growth rate recorded in Q1 2023 and 0.175 points lower than the 1.40% growth rate in the preceding quarter (Q3 2024).
#4: Oil & Gas (Services)
The Oil & Gas Services sector, which is the downstream sector, has secured N3.88 trillion in bank credit, up from N1.96 trillion in March 2023, showing a significant 97.96% increase. This includes services related to the post-production of crude oil and natural gas, and bringing products to consumers, which are essential for the oil and gas industry.
#3: Manufacturing
The Manufacturing sector has received N8.70 trillion in bank credit, up from N5.66 trillion in March 2023, marking a 53.71% increase.
This sector includes the production of goods ranging from consumer products to industrial equipment, driving industrialization and economic diversification in Nigeria.
In Q1 2024, manufacturing contributed 9.98% to the real GDP, down from the 10.13% contribution by the sector in Q1 2023 but a 1.90%-point increase from the 8.23% contribution by the sector in the preceding quarter (Q4 2023). The sector grew by 1.49% during the quarter, a 0.12%-point drop from the 1.61% growth rate in Q1 2023.
#2: General
The General sector, encompassing various unspecified or miscellaneous activities, has secured N8.75 trillion in bank credit, up from N2.79 trillion in March 2023, reflecting a 213.98% increase.
This category highlights the diverse nature of bank lending across multiple unspecified sub-sectors.
#1: Oil & Gas
Topping the list, the Oil & Gas sector has received the highest bank credit at N10.99 trillion, up from N4.88 trillion in March 2023, marking a 125.41% increase.
This sector is crucial for Nigeria’s economy as it includes activities related to the exploration and production of oil and natural gas, which are major sources of revenue and foreign exchange for the country. The oil and gas sector contributed 6.38% to the GDP in Q1 2024. ,
The increase in oil production during the quarter to an average of 1.57 million bpd from the preceding quarter’s 1.55 million bpd was a contributory factor to the sector’s 5.70% growth during the quarter.