January 9, 2025/CSL Research
The Central Bank of Nigeria (CBN) recently released its Quarterly Statistical Bulletin for Q3 2024 comprising of aggregated data across financial statistics, government finance, real sector, and the external sector. The Deposit Money Banks’ sectoral distribution of credit shows that total private sector credit as of September 2024 rose by 2.09% month-on-month (m/m) to 58,571.99 billion from ₦57,372.47 billion in August 2024. On a year-on-year basis, it was up 49.78% from ₦39,106.01 billion in September 2023.
Business services classified as Others recorded the highest m/m growth in credit distribution, advancing by 23.47% m/m to ₦1,378.73 billion from ₦1,116.61 billion, followed by Trade/General Commerce in the second spot with a m/m appreciation of 21.59% to ₦4,234.08 billion from ₦3,482.34 billion in the prior month. Finance, Insurance and Capital Market services was the third on the list, with a 9.32% m/m increase to ₦7,519.46 billion (Aug-24: ₦6,878.30 billion). On the flip side, general services, industrial manufacturing, and the educational services business categories witnessed the most substantial drop in private credit distribution in the month of September 2024, declining by 8.77%, 6.96%, and 4.97% m/m respectively to ₦5,005.65 billion, ₦8,673.67 billion, and ₦92.10 billion from ₦5,486.71 billion, ₦9,322.26 billion, and ₦96.92 billion in that order.
Industrial oil & gas (₦12,998.32 billion), manufacturing (₦8,673.67 billion), and finance, insurance and capital market services (₦7,519.46 billion) retained their top slots as the sectors with the largest amount of private sector credit distributions in the last month of the quarter, contributing 22.19%, 14.81%, and 12.84% correspondingly to the overall private sector credit of ₦58,571.99 billion for the month.
Analysis of data from the Deposit Money Bank’s (DMBs) sectoral distribution of credit shows a vivid picture of the skewness of credit extension by DMBs to sectors within the economy, especially in light of risk to businesses and subsisting legacy issues associated with many sectors which make them unattractive for funding. Key sectors in the real economy are still starved of much-needed funds to facilitate substantial economic growth via strategic investments. Credit to the agriculture, industrial mining & quarrying, industrial power & energy, construction, and educational services sectors remain abysmal at contributions of 3.95%, 0.09%, 1.92%, 3.97%, and 0.16% respectively to the overall private sector as of September 2024.
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