Recent data from the Central Bank of Nigeria (CBN) revealed that the credit issued to the Nigerian private sector rose to N43 trillion but despite a rise in loans. The country’s low credit-to-GDP ratio is seen as a persistent challenge to the growth of its private sector.
To address these issue, there is need for a more balanced allocation of credit between the government and private sector, with greater support for SMEs and initiatives to improve infrastructure and competitiveness.
The Chief Executive of the Center for the Promotion of Private Enterprise, Dr. Muda Yusuf, said “we need to look at what percentage the loan is to the GDP because you cannot just take a nominal figure and begin to assess it.” He asserted that as of his last check, the percentage of private sector credit to GDP was about 12%. He said when you compare the percentage with that of other economies like South africa, Egypt, Morocco, and other countries, Nigeria’s percentage was the lowest.
Similaryly, the Chief Executive of Economic Associates, Dr. Ayo Teriba, also alluded to the fact that Nigeria generates about N50 billion monthly or N150 billion quarterly compared to N1.3 trillion loans to the private sector for the quarter, which is less than 1% the growth may not be significant.
Commenting on the development, the chief executive of Anthill Concepts Limited, and economic affairs analyst, Dr. Emeka Okengwu said when you are in inflation, the usual thing to do is to spend your way out; but in doing that you need to be able to support your private sector as much as you can.