Private Sector Credit Surged 30% YoY to N75.85tn in September

Nume Ekeghe

Nigeria’s private sector credit expanded significantly in the first nine months of 2024, reaching N75.85 trillion in September, a 30 per cent year-on-year increase from N59.51 trillion in September 2023.

A monthly breakdown of the money and credit data posted on the Central Bank of Nigeria (CBN) website reveals an active lending landscape in 2024, starting with N76.48 trillion in January, an 84 per cent increase compared to N41.54 trillion in January 2023. February marked the peak of private sector credit for the year at N80.86 trillion, a 93.7 per cent rise from N41.75 trillion in February 2023.

Credit dipped slightly to N71.21 trillion in March, reflecting cautious lending due to tighter monetary conditions. However, lending activity rebounded in April, rising to N72.91 trillion.

May and June saw relatively stable credit levels at N74.31 trillion and N73.19 trillion, respectively. July recorded a modest uptick to N75.51 trillion, highlighting increased lending to small and medium-sized enterprises (SMEs) amid growing inflationary pressures. In August, credit fell slightly to N74.73 trillion before climbing to N75.85 trillion in September, marking a 27.4% jump from N59.51 trillion in September 2023.

The year-on-year comparison paints a stark contrast between 2023 and 2024. In 2023, credit levels ranged from N41.54 trillion in January to N59.51 trillion in September, reflecting subdued lending activity amid economic uncertainties and limited credit access for businesses.

However, credit to the Nigerian government surged to N42.02 trillion in September 2024, representing a significant 90 per cent year-on-year increase compared to N22.14 trillion in the same month of 2023.

A monthly breakdown of 2024 figures highlight the volatility in government borrowing throughout the year. January began with N23.52 trillion, 11.7 per cent lower than the N26.64 trillion recorded in January 2023. However, February saw an extraordinary leap to N33.93 trillion, up 19.6 per cent year-on-year from N28.43 trillion in February 2023, as the government ramped up borrowing.

March experienced a sharp decline in credit to N19.59 trillion, reflecting reduced borrowing activity following the elections. This modest trend continued into April, with credit slightly increasing to N19.98 trillion, 35 per cent lower than the N30.76 trillion recorded in April 2023.

Borrowing rebounded in May, reaching N28.38 trillion. Credit dipped in June to N23.93 trillion before falling further to N19.83 trillion in July, signaling a temporary pullback in public sector borrowing during the mid-year.

August marked another significant upswing, with credit to the government rising to N31.15 trillion, 38.4 per cent higher than N22.51 trillion in August 2023. The borrowing trend culminated in September with an unprecedented N42.02 trillion, driven by financing needs for debt service obligations and capital projects.

Year-on-year comparisons reveal the considerable growth in government borrowing. While credit in 2023 fluctuated between N26.64 trillion in January and N22.14 trillion in September, 2024 figures demonstrate more aggressive borrowing patterns.