By Chinwendu Obienyi
Despite Nigeria’s economic frailties, available data from the Central Bank of Nigeria (CBN) has revealed that total credit to the Nigerian economy including the Federal Government and the private sector, rose to a whopping N15.48 trillion between January and November 2022.
According to the apex bank’s “Money and Credit” statistics, credit to the private sector economy surged to unprecedented levels in November 2022, reaching an all-time high of N64.22 trillion.
This represents an increase of 1.16 per cent compared to N63.48 trillion recorded in the previous month.
As of November 2022, banking sector loans to the government stood at N22.64 trillion, while credit to the private sector was N41.58 trillion, representing 35 per cent and 65 per cent of the total credit to the economy, respectively.
Meanwhile, analysis of the data showed that the increase in aggregate credit was largely driven by government sector.
For instance, 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 per cent raise in 11 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 per cent increase year to date.
This also represented a N64.22 trillion recorded in 11 months of 2022. The Nigerian economy witnessed a massive surge in its credit in the past three years, on the back of the low-interest rate environment following the COVID-19 induced recession in 2020, as seen in the data obtained from the bank’s website.
According to the CBN, the Nigerian economy was able to recover from the economic contraction at a faster pace due to the intervention of credit into the economy, which ensured that the nation recorded growth after only two consecutive GDP decline.
Credit to the domestic economy plays a significant role in the growth of the economy as it helps spur growth in economic activities in the real sector.
The CBN during its November 2022 MPC communique revealed that its policies have helped ensure a sustained positive trajectory for the economy.
“The economy has thus, sustained positive output growth for seven consecutive quarters, following the exit from recession in 2020. The consistent positive performance recorded was driven largely by the positive growth in the non-oil sector, particularly in the services and agricultural sub-sectors, complemented by continued policy support by the bank,” the CBN said.
According to the CBN, the Nigerian economy was able to recover from the economic contraction at a faster pace due to the intervention of credit into the economy, which ensured that the nation recorded growth after only two consecutive GDP.
