Bank credit to government and private sector increases to 63.3 tr

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Bank credit to government and private sector increases by 34% year-on-year

By Jeph Ajobaju, Editor-in-Chief

According to the latest data released by the Central Bank of Nigeria (CBN).

CBN Money and Credit Statistics show that the N63.3 trillion comprises government borrowing of N22.8 trillion and private sector borrowing of N40.5 trillion.

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Government lending from banks grew 75% year-on-year and private sector lending 19%.

CBN data also shows that currency in circulation (CiC) increased by 12.6% year-on-year, from 2.84 trillion naira in September 2021 to 3.2 trillion naira in September 2022, per Avant-garde.

Last month, the Senate approved new loans of 8.4 trillion naira ($19 billion) for 2023 to help finance an estimated federal government budget deficit of 10.5 trillion naira.

The World Bank has warned that the new loans will increase Nigeria’s rising debt servicing costs, which have exceeded revenues in the first four months of this year through April (4M 2022) and could reach 102% of revenues government by December 2022.

Finance Minister Zainab Ahmed has said the proposed budget deficit for 2023 could reach N12.4 trillion, if the fuel subsidy continues beyond June 2023.

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This would force the government to borrow even more, with revenue expected at 8.46 trillion naira, less than half of the proposed 2023 expenditure of 19.76 trillion naira.

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Banks provide loans of N61.2tr to increase economic activities

Credit extended by banks for economic activities jumped 2.17 percent to 61.2 trillion naira in August from 59.9 trillion naira in July, according to data from CBN Money and Credit.

Currency in circulation rose 0.9% to 3.24 trillion naira in August from 3.21 trillion naira in July.

Data shows that the N61.2 trillion credit included N21 trillion extended to the government, which increased by 4.4% from N20.1 trillion in July.

A total of 40.2 trillion naira was approved for the private sector, a 1.0% month-on-month (MoM) increase above 39.8 trillion naira in July.

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