By Tosin Ayinde

Meaningful growth, it seems, awaits Nigeria’s private sector in view of the recent credit access growth recorded in February 2023. This stride was enabled by the Central Bank of Nigeria (CBN) ‘Loan-to-Deposit Ratio’.

In figures posted on the CBN website, credit access to the private sector increased by ₦‎212billion or 0.51 percent Month-on-Month (MoM) in February to ₦41.75trillion as against ₦41.54trillion reported in January 2023.

It is noteworthy that the manufacturing, general commerce, and oil & gas are key sectors benefiting from private sector lending. Also, CBN’s “money and credit” data also reveals that credit to the private sector in 2023 gained 16.03 percent in its Year-on-Year (YoY) growth from a reported ₦35.99trillion in February 2022 to ₦41.75trillion in February 2023.  Reports also show that credit to the private sector in 2022 crossed the ₦41 trillion mark as analysts predict further increase, driven by government expansion in budgets, among other factors.

Kingsley Obiora, Deputy Governor, Economic Policy at the CBN, at the first MPC meeting of 2023, attributed the increase to the apex directive on Loan-to-Deposit Ratio (LDR), which has encouraged banks to increase lending to the real sector of the economy, and business strategy and competition.  “The increase in credit to the key sectors of the economy is expected to bolster aggregate demand and promote economic growth, job creation, and poverty alleviation,” he added.

Aisha Ahmad, Deputy Governor, Financial System Stability of CBN noted that the financial system has provided significant support for needed domestic economic resilience amidst global shocks and remained strong into 2023, just as currency outside banks increased by ₦51.13billion to ₦843.3billion in February 2023 from ₦792.18billion in January 2023.

If this positive growth is sustained, it is safe to say that the private sector is set for greater expansion.

Meiza Nigeria