The aggregate domestic credit to both the public and private sectors of the economy rose by 24.57 per cent in October, the Central Bank of Nigeria has said.
The Governor of the CBN, Mr. Lamido Sanusi, gave the figure in Abuja, shortly after the Monetary Policy Committee meeting on Monday.
Sanusi said when annualised, credit to the economy grew by 29.48 per cent. However, he noted that this was below the indicative benchmark of 32.58 per cent for 2011.
He attributed the growth to increases in credit to the private sector as well as state and local governments.
For instance, the apex bank boss pointed out that credit to the private sector grew by 24.24 per cent.
According to him, this is higher than the indicative benchmark of 23.34 per cent for 2011.
Conversely, he said credit to the Federal Government fell by 21.65 per cent, explaining that the figure was below the indicative benchmark growth rate of 29.29 per cent for the year.
He said, “The growth in aggregate credit (net) in October 2011 was due to increases in credit to the private sector as well as states and local governments. Credit to the private sector grew by 24.24 per cent (29.09 per cent on annualised basis), which was higher than the indicative benchmark of 23.34 per cent for 2011.
“However, credit to the Federal Government, which fell by 21.65 per cent (25.98 per cent on annualised basis), was below the indicative benchmark growth rate of 29.29 per cent for 2011. This was due to the fiscal surplus of N307.84bn in July 2011, which followed the sharing of the arrears of budget augmentation (January to April, 2011) which reduced the need for government borrowing.”
He explained further that Deposit Money Banks had also improved interest rates on fixed term deposits.
He said, “The average weighted three-month deposit rate went up to 7.06 per cent in October from 5.49 per cent in September. Also, the rates on deposits for 12 months increased from 4.47 per cent in September to 4.90 per cent in October, 2011.
“The average weighted interest bearing deposit rate stood at 4.93 per cent in October, compared with 4.02 per cent in September. This increase in rates had been anticipated and is likely to continue, especially as we approach the December 31, 2011 deadline for the removal of the CBN guarantee on the inter-bank market.”
Source: Punch/Ifeanyi Onuba
