Credit to private sector hits N22.6trn in one month

* As Forex stability aides lending to real sector

In what appeared to reflect the concerted efforts to revamp the economy, Credit to Private Sector has appreciated by 2.8per cent to N22.6 trillion in February from N21.9 trillion in January.

This development was made available to The Daily Times by the Central Bank of Nigeria (CBN).

The increased lending by commercial banks to Private sector is coming on the heels of real annual growth rate by 0.83 per cent in 2017, higher by 2.42 per cent than -1.58 per cent recorded in 2016.

The stability in foreign exchange market also aided commercial banks lending to real sector of the economy.

The apex bank Money and Credit Statistics revealed that credit to private sector in last year January and February was at N21.88 trillion and N22.2 trillion respectively.

The CBN data stated that private sector lending to real sector stood at N22.37 trillion as at February 2017.

Over Banks lending, the CBN in February said Manufacturing Purchasing Managers’ Index (PMI) closed February at 56.3 index points from 57.3 index points in January.

The 56.3 index points indicated expansion in the manufacturing sector for the 11th consecutive months, the report by CBN said.

The CBN uses Production Level, New Orders, Supplier Delivery Time, Employment Level and Raw material Inventories to measure PMI monthly

According to CBN, PMI index however grew at a slower rate, when compared to that in the previous month.

Analysts who spoke to our correspondent said banks are investing in the Oil & Gas sector over improved global oil prices.

The NBS in a report noted that banks’ lending to Agriculture sector continued to drop, while banking investment in the Oil & Gas increased significantly.

On domestic assets creation, Net Domestic Assets (NDAs) gained 2.1 per cent to N17.3 trillion from N16.9 trillion in January accompanied by a four per cent m-o-m increase in Net Domestic Credit (NDC) to N269 trillion in February from N25.8 trillion in prior month.

The Statistics by CBN disclosed that Credit to Government gained 11 per cent to N4.3 trillion from N3.86 trillion in January.

The increase in credit to the Government was, in part, informed by the sustained preference for safe assets by lenders due to relatively high yields.

The decline in headline inflation to 14.33 per cent in February, according to National Bureau of Statistics (NBS), also followed moderation in money supply as Broad Money increased to N24 trillion in February from N23.8 trillion in January 2018.

Net Foreign Assets (NFA) moved to N14.4 trillion in February, a drop of three per cent to N14.9 trillion as foreign exchange reserves position to average $42 billion as well as increase in Foreign Portfolio Inflows (FPIs).

On the other hand, increase in Broad Money followed a 0.1 per cent decrease in Narrow Money to N10.73 trillion (of which Demand Deposits fell by 0.2 per cent to N9.20 trillion) to more than offset a two per cent m-o-m increase in Quasi Money (near maturing short term financial instruments) to N13.3 trillion.

Meanwhile, Reserve Money (Base Money) moderated m-o-m by 6.4 per cent to N6.4 trillion from N6.06 trillion in January as bank reserves tanked m-o-m by 10.5 per cent to N4.16 trillion.

However, currency in circulation fell m-o-m by 0.42 per cent to N1.94 trillion from N1.95 trillion in January.