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Tag: Economy

  • Banks’ll Increase Credit To Economy in 2022, Says CBN

    Banks’ll Increase Credit To Economy in 2022, Says CBN

     

    The Governor of the Central Bank of Nigeria, CBN, Godwin Emefiele, has said the banking sector will increase access to finance and credit for households in 2022.

     

    Emefiele said this recently in Lagos, according to a statement on Thursday.

     

    “The policy focus of the bank for 2022 is with a pledge to sustain improved access to finance and credit for households and businesses, mobilise investment to boost domestic productivity, enable faster growth of non-oil exports, and support employment generating activities,” he said.

     

    He noted that the country had been able to contain some of the effects of the COVID-19 pandemic on the economy.

     

    He stressed the need for all stakeholders to work to build a more resilient economy that would be better able to contain external shocks, while supporting growth and wealth creation in key sectors of our economy.

     

    According to him, a major lesson from the COVID-19 pandemic was that deliberate efforts must be made to diversify the base of the Nigerian economy.

     

    Emefiele said the country must do everything possible to reduce the importation of goods into the country.

     

    “Proactive steps on the part of stakeholders in the private sector, in collaboration with the government in supporting the growth of sectors such as manufacturing, ICT, and infrastructure, will strengthen our ability to deal with the challenges of COVID-19, and stimulate further growth of our economy,” he added.

     

    Speaking on the need to build an efficient infrastructure ecosystem in Nigeria and the role of improved infrastructure to the development of the Nigerian economy, he disclosed that all necessary approvals had been obtained for the full commencement of the Infrastructure Corporation in early 2022.

     

  • Again, Nigeria Exits Recession

    Again, Nigeria Exits Recession

    Nigeria’s Gross Domestic Product (GDP) grew by 0.11% (year-on-year) in real terms in the fourth quarter of 2020, representing the first positive quarterly growth in the last three quarters.

     

    This is contained in the Nigerian Gross Domestic Product report, published by the National Bureau of Statistics (NBS).

     

    According to the report, the growth was largely driven by positive growth recorded in the information and communication sector (15.9%) and agriculture (3.42%).

     

    Highlights

    The oil sector plunged by 19.76% (year-on-year) in real terms as against a contraction of 13.89% recorded in Q3 2020.

     

    The non-oil sector on the other hand grew by 1.69% in real terms, an improvement compared to the contraction of 2.51% recorded in Q3 2020. It however was slower than 2.26% recorded in the corresponding period of 2019.

    The service sector contributed 54.28% to the GDP in Q4 2020, followed by agriculture, which contributed 26.95%, and industries with 18.77%.

     

    Non-oil accounted for 94.13% while the oil sector accounted for 5.87% of the total GDP for Q4 2020.

     

    Oil sector

    The oil sector contracted by 19.76% (year-on-year) in Q4 2020, a downturn compared to a similar contraction of 13.89% recorded in the previous quarter (Q3 2020).

     

    It also represents a decline of 26.12% points when compared to a positive growth of 6.36% recorded in the corresponding period of 2019.

     

    The sector’s contribution to Nigeria’s GDP also reduced to 5.87% in Q4 2020 from 8.73% recorded in Q3 2020 and 7.32% in Q4 2019.

     

    In Q4 2020, average daily oil production of 1.56 million barrels per day (mbpd) was recorded, representing a 6.59% and 22% declines when compared to 1.67mbpd and 2mbpd recorded in Q3 2020 and Q4 2019 respectively.

    The decline in the oil sector activity can be attributed to the crash in global crude oil prices, which was triggered by the oil price war between Saudi Arabia and Russia.

     

    Non-oil Sector

    The non-oil sector grew by 1.69% in real terms in Q4 2020, slower than the 2.26% recorded in the corresponding quarter of 2019, but better than the 2.51% negative growth rate recorded in the preceding quarter.

     

    Growth in the sector was largely driven by Information and Communication (Telecommunications & Broadcasting).

     

    Other drivers were Agriculture (Crop Production), Real Estate, Manufacturing (Food, Beverage & Tobacco), Mining and Quarrying (Quarrying and other Minerals), and Construction.

     

    In real terms, the Non-Oil sector contributed 94.13% to the nation’s GDP in the fourth quarter of 2020, higher than the share recorded in the fourth quarter of 2019 (92.68%) and the third quarter of 2020 (91.27%).

     

    Key sectors’ performance

    The agricultural sector, in the fourth quarter of 2020, grew by 3.42% (year-on-year) in real terms, an increase by 1.11% points from the corresponding period of 2019, and an increase of 2.03% points from the preceding quarter which recorded a growth rate of 1.39%.

     

    The sector also contributed 26.95% to the overall GDP in real terms in Q4 2020, higher than the contribution in Q4 2019 but lower than Q3 2020 which stood at 26.09% and 30.77% respectively.

     

    Real GDP growth in the manufacturing sector in the quarter under review stood at –1.51% (year on year), lower than the corresponding period of 2019 and the preceding quarter by 2.75% points and 0.01% points respectively.

     

    The real contribution to GDP in Q4 2020 was 8.60%, lower than the 8.74% recorded in the fourth quarter of 2019 and 8.93% recorded in Q3 2020.

     

    In real terms, the Trade sector contracted by 3.2% (year-on-year) in the fourth quarter of 2020, which was 2.62% points lower than the rate recorded in Q4 2019, and 8.92% points higher than in the preceding quarter.

     

    Trade’s contribution to GDP was 15.46%, which is lower than the 15.99% it represented in the corresponding period of 2019, but higher than the 13.88% recorded in the previous quarter.

     

    Information and communication recorded a growth rate of 14.95% in real terms, an increase of 6.45% points over the corresponding period of 2019.

     

    The sector contributed 15.06% to aggregate real GDP in Q4 2020, higher than the same quarter of the previous year in which it represented 13.12% and higher than the preceding quarter, in which it represented 13.47%.

     

    What this means

    The positive growth in real GDP indicates that the Nigerian economy has recovered from the pandemic-induced recession which disrupted economic activities in most part of 2020. The country will look to post capitalise on this to boost the economy further in subsequent quarters.

  • Banks’ Credit To Economy Hit N25tn In 2020

    Banks’ Credit To Economy Hit N25tn In 2020

    Banks’ total credit to the economy rose to N25.02tn as of the end of 2020, the Central Bank of Nigeria has said.

     

    This was disclosed during the Monetary Policy Committee meeting in Abuja on Tuesday.

     

    Delivering the committee’s submissions, the CBN Governor, Mr Godwin Emefiele, said the figure rose by 13.4 per cent between November and December.

     

    He said, “Aggregate domestic credit, also moved further up by 13.40 per cent in December 2020, compared with 9.48 per cent in the previous month.

     

    “This was largely attributed to the bank’s policy on Loan-to-Deposit Ratio, complemented by its interventions in various sectors of the economy.

     

    “Consequently, banking sector gross credit as at end-December 2020 stood at N25.02tn compared with N24.25tn at the end of November 2020, representing an increase of N774.28bn.”

     

    The committee urged the bank to sustain its current drive to improve access to credit to the private sector while exploring other complementary initiatives, in collaboration with the Federal Government, to improve funding to critical sectors of the economy.