Banks’ credit to govt rises by N11tn – Report

Interest rate hikeNigeria’s top five banks gross N4.5 trillion in one yearwill affect developers - operators

Banks credit to the government rose by N11.75tn in one year, figures obtained from the Central Bank of Nigeria have revealed.

The CBN disclosed in its ‘Money and credit statistics’ report that the credit rose from N14.9tn as of the end of January 2022 to N26.65tn in the corresponding period of 2023.

According to reports released by the CBN at the last Monetary Policy Committee meeting in January, a member of the committee, Aliyu Sanusi, said in his personal statement that the key drivers of the Net Domestic Asset was net claims on government which grew by 78.15 per cent in December 2022.

Read:  Neimeth pharmaceuticals reports N365.5m profit on growing revenue

This in turn was driven by FGN’s borrowing from the Central Bank of Nigeria.

A member of the MPC, Edward Adamu, said, “The outlook for fiscal policy remains inclement. The envisaged deficit in 2023 is large and may be financed in part by the banking system.

“As at end November 2022, banking system net claim on government had grown by about 63.58 per cent relative to end-2021. Fiscal 2023 could see a more rapid growth in the aggregate unless financing conditions in the domestic economy tighten. Ultimately, government revenue must improve to complement monetary policy towards reining-in inflation.”

Read:  IMF reviews Nigeria’s growth upwards to 3.2%

He added that up to November 2022, key monetary aggregates grew in excess of their programmed levels by significant margins.

A key money market rate, the open buy back, trended downwards in December pointing also to a surfeit of liquidity in the banking system, he said.

According to him, “Although today’s inflation is not entirely driven by money, elevated liquidity levels could undoubtedly exacerbate it; hence the need to deploy measures to bring it under control.

Read:  Facebook changes parent company name to Meta

“This is especially important in view of the uptick in political activities and campaign spending towards the general elections scheduled to take place in the first quarter of 2023.”


Related posts

Access Bank to train 500,000 MSMEs on financials and ICT


Emefiele tasks banks on sustainable principles in money lending


Currency in circulation hits new high, nears N3trn mark


SecondSTAX, NGX partner to boost investment inflow to Nigeria.


Crypto market value tops $3 Trillion for first time


Neimeth’s N3.67bn rights issue to open August 3


Leave a Comment