Total banking sector credit to economy climbs to N53.2trn in Q1 2024
Total banking sector credit to the Nigerian economy rose to about N53.2 trillion at the end of the first quarter of 2024.
Latest data from the Central Bank of Nigeria (CBN) revealed the banking sector’s lending to different sectors of the economy.
According to the data from the Apex Bank, there was a 76 per cent increase from the N30.3 trillion reported in the same period in 2023. It also represents a 20 per cent 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% per cent which is far lower than the 70 per cent recorded in South Africa.
In the first three months of 2024, about N8.7 trillion was borrowed from banks in Nigeria across various sectors.
The Information & Communication sector got N1.67 trillion in bank credit, up from N1.28 trillion in March 2023, reflecting a 30.47 per cent increase.
The sector witnessed a growth of 6.23 per cent in the first quarter of 2024.
The Construction sector has N1.83 trillion in bank credit, up from N1.16 trillion in March 2023, marking a 57.76 per cent 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 the first quarter of 2024 contracted by 0.29 per cent year-on-year, in contrast with the 37.7 per cent growth posted by the sector in the first quarter of 2023.
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 per cent increase.
This financing supports farming, livestock, fisheries, and agribusiness, essential for food security and rural development. The sector contributed 21.07 per cent to the GDP, with crop production alone accounting for 19.24 per cent of this figure.
This represents a decrease from the contributions in the first quarter of 2023, which stood at 21.66 per cent and the fourth quarter of 2023, which stood at 26.11 per cent.
In the first quarter of 2024, the agricultural sector grew by 0.18 per cent year-on-year, up by 1.08 per cent-points from the first quarter of 2023 but down by 1.92 per cent -points from the previous quarter’s growth rate of 2.10 per cent.
The banking sector lending to the government stood at N2.58 trillion, slightly down from N2.60 trillion in March 2023, showing a 0.77 per cent decrease.
This credit supports various government activities, including public administration, social services, and infrastructure projects.
The Finance, Insurance, and Capital Market sector received N3.41 trillion credit up from N2.64 trillion in March 2023, indicating a 29.17 per cent 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 per cent, which was a 1.44 percentage -point increase from the 5.31 per cent recorded in the first quarter 2023.
