CBN: Credit to Private Sector Increased by N212bn in February

Nume Ekeghe

The Central Bank of Nigeria (CBN) has disclosed that credit to private sector increased by N212 billion or 0.51 per cent Month-on-Month (MoM) in February to N41.75 trillion as against N41.54 trillion reported in January 2023.

The apex bank disclosed this in its “money and credit” statistics posted on its website.

The apex bank disclosed that credit to manufacturing, general commerce, and oil & gas are key sectors benefiting from private sector lending.

It added that credit to the private sector so far in 2023 gained 16.03 per cent in its Year-on-Year (YoY) growth from a reported N35.99 trillion in February 2022 to N41.75 trillion in February 2023. 

Findings showed that credit to the private sector in 2022 crossed the N41trillion mark and experts have predicted further increase, driven by government expansion in budgets, among other factors. 

During the first MPC meeting of 2023, the Deputy Governor, Economic Policy, CBN, Kingsley Obiora, in his personal statement attributed the increase to the CBN 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. 

He added: “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.” 

Also, the Deputy Governor, Financial System Stability, CBN Aisha Ahmad noted that the financial system has provided significant support for needed domestic economic resilience amidst global shocks and remained strong into 2023. 

The CBN report also revealed that currency outside banks increased by N51.13billion to N843.3billion in February 2023 from N792.18billion in January 2023.

The reported N842.3billion is the lowest since 2010 and it is coming on the backdrop of CBN’s old currency swap policy.

The CBN’s statistics showed that currency outside banks dropped by -69.04 per cent in its YoY performance from N2.72trillion in February 2022 to N842.3billion in February 2023. 

The CBN governor, Mr. Godwin Emefiele at the second Monetary Policy Committee meeting in Abuja, noted that the naira redesign and cash withdrawal limit policies have resulted in a sizeable reduction in currency-outside banks, indicating an expected improvement in the potency of monetary policy tools.