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Loans to Economy Records All-Time High in 2022

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naira, interest rate

CEM REPORT, FINANCE | The Nigerian economy has received a total credit of N64.22 trillion as of November 2022.

This is an all-time high with an increase of 1.16% when compared to N63.48 trillion recorded as of the previous month.

On a year-to-date basis, the total credit to the Nigerian economy (government and private sector) rose by a massive N15.48 trillion between January and November 2022.


This is according to data released by the Central Bank of Nigeria (CBN).

As of November 2022, credit to the government stood at N22.64 trillion while credit to the private sector was N41.58 trillion, representing 35% and 65% of the total credit to the economy, respectively.

A critical review of the data reveals that the increase in aggregate credit was largely driven by government credit.

Specifically, credit to the government increased by N8.79 trillion in the review period, from N13.84 trillion recorded as of December 2021 to N22.64 trillion, which represents a 63.6% increase in eleven months.

On the other hand, credit to the private sector increased by N6.66 trillion between January and November 2022 to stand at N41.58 trillion, a 19.1% increase year to date.

Similarly, credit to the public sector, which comprises loans to the federal and state governments has surged by over 63% year to date, contributing about 57% to the total new net loans recorded in the review period.

The increase in net loans in the Nigerian economy is particularly interesting considering that the CBN is trying to mop up liquidity by discouraging credit with higher interest rates. Comparing the N15.46 trillion increase to previous years, Nigeria’s loan facility to the economy has surged significantly.

Meanwhile, it is worth noting that the increase in the government credit line is a result of its revenue underperformance, necessitating the incurring of debt securities both from local and foreign sources.

The Central Bank of Nigeria has also confirmed over N22 trillion has been extended to the government as Ways and Means of lending.

Credit to the domestic economy plays a significant role in the growth of the economy in that it helps spur growth in economic activities in the real sector.


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