Manufacturers, traders, others repay N3.31tn loan

Industry players in the manufacturing, trade, power, mining, construction and five other key economic sectors have paid a total sum of N3.31tn to offset loans obtained from commercial banks between January and June 2024, Saturday PUNCH reports.

According to the sectoral distribution of credit data obtained from the latest Central Bank of Nigeria statistics bulletin, the sectors opted to reduce their credit obligations from N30.75tn to N27.44tn within six months due to the increasing cost of debt servicing.

Other sectors include Energy, oil and gas, Information and communication, transportation and storage, and government.

Sectoral credit encompasses loans, trade credits, other receivables, and support from banks to 14 key economic sectors over a specific period, serving as a global indicator of the banking sector’s balance sheet resilience and its contribution to the national economic agenda.

The credit reduction was likely to have been influenced by the interest rate hike stance taken by the Monetary Policy Committee of the CBN to fight inflation.

Typically, the affected sectors prefer to secure loans that enable them to upscale their operations and enhance economic productivity rather than simply acquiring more resources or capital without a strategic purpose.

An analysis of the report showed that borrowing from commercial banks reduced by 10.76 per cent to N27.44tn.

In the corresponding period of 2023, these sectors were able to secure loans totaling N5.69tn.

A cursory look showed that the trade and commerce sector repaid the highest sum of N1.05tn within the review period. Second on the list is the Information and communication sector, with a debt repayment of N830.28bn.

This was followed by the manufacturing sector which repaid a sum of N760.12bn to clear part of its debt.

Other sectors that reduced their borrowings include Oil and gas with debt repayment of N380.94bn, transportation and storage (N38.39bn), Energy (N27.08bn), construction (N124.61bn), power (N28.8bn), and mining and quarrying with (N833m).