Operators in the nation’s manufacturing sector saw their combined debts to Nigerian banks rise from N5.56tn in January 2023 to N6.98tn in June 2023, according to the Central Bank of Nigeria’s Sectoral Analysis of Deposit Money Banks’ Credit.
This is as they borrowed the sum of N1.42 trillion between January 2023 and June 2023.
This implies that banks’ credit to the sector increased by 52.08 per cent in one year from N4.53tn as of June 2022 to N6.98tn as of June this year as the sector received the largest share of the credit from banks during the review period.
Monthly analysis of lending showed that N5.56tn was borrowed in January, N5.57tn in February, N5.65tn in March, N5.81tn in April, N5.70tn in May and N6.98tn in June.
Recall that the Monetary Policy Committee of the apex bank have continued to increase the benchmark interest rate from 11.5 per cent earlier last year, to 18.75 per cent in June this year, across eight consecutive rate hikes as part of strategies to reduce inflation and mop up liquidity from circulation.
With the increase in debts, stakeholders in the manufacturing sector have maintained that the current double-digit lending rate is unfavourable as it has a direct impact on the cost of production and the competitiveness of the sector.
The government in the recently released Medium-Term Expenditure framework and fiscal strategy paper restated its commitment to increase credit to private sector operators.
