CBN data shows net credit to private sector rises in July 2024 to N74.9trn – CIBN President
By Matthew Denis
The President of Chartered Institute of Bankers of Nigeria (CIBN), Prof. Pius Deji Olanrewaju has disclosed that the Data from the CBN shows that Net Credit to the Private Sector as of July 2024 was N74.9 trillion compared to N46.3 trillion in July of 2023.
He made the disclosure during the 17th Annual CIBN Banking and Finance conference held in Abuja on Tuesday.
Prof. Olanrewaju who is also the Chairman of the Council of CIBN said “Data from the CBN shows that Net Credit to the Private Sector as of July 2024 was N74.9 trillion compared to N46.3 trillion in July of 2023 and N37.5 trillion in 2022. This signifies a 99.6% increase in domestic credit to the private sector over the last two years.
He explained that It is no longer news that Nigeria is blessed with vast natural resources and favourable climate. However, it is very unfortunate, that we are yet to reap the full benefits of these resources. For example, according to the Food and Agriculture Organization (FAO) of the United Nations, Nigeria has an estimated total arable land of 34.2 million hectares (this is 42% of our total land area).
“The estimated size of land used for farming is 23.1 million hectares (which is 67% of arable land). This means that about 11.1 million hectares (32% of arable land) remain uncultivated or unused for farming.
The CIBN president lamented that the economy has been struggling with incessantly high inflation which rose to a 28-year high of 34.19% in June 2024 noting that it is worth mentioning that this high inflation declined to 33.4% in July 2024.
According to him the Bank recapitalization Initiative that was unveiled by the Governor CBN during the last CIBN Annual Bankers Dinner is going to strengthen Nigeria’s banking sector, increase banks’ lending capacity, boost foreign direct investment, contribute to the growth and development of Nigeria
Increasing Financial Inclusion.
“The Shared Agency Network Expansion Facility (SANEF) initiative launched by the Central Bank of Nigeria in collaboration with the Banks has since its inception successfully enabled over 40 million previously unbanked Nigerians to access financial services while processing transactions worth over N10 trillion (approximately $13 billion) annually.
“Investment in Infrastructure – Infracorp Project CIBN established the Infrastructure Corporation of Nigeria (Infracorp) in 2021. Infracorp aims to raise over N15 trillion (approximately $36.7 billion) to support investment in critical infrastructure projects nationwide
“The CBN recorded 136% increase in FX inflows in the first quarter of 2024 compared to the previous year.
CBN record shows an increase in remittance inflows, reaching $553 million in July 2024, a 130 per cent increase from the corresponding period in 2023.
“A considerable growth in the country’s foreign reserves from approximately $33.2 billion in October 2023 to $36.5 billion in August 2024.
According to the National Bureau of Statistics (NBS) Nigeria’s GDP grew by 3.19% in the second quarter of 2024. This is better than the performance of 2.51% in the second quarter of 2023.
Observing the success stories of countries like India and China implies that Nigeria must grow at a rate high enough to lift over 80 million people out of extreme poverty. For example, undergoing various economic reforms, China’s GDP growth has averaged over 9% per year since the reforms began in 1978 (World Bank).
This rapid growth has been a significant driver of poverty alleviation with nearly 800 million people lifted out of poverty. Likewise in India, economic reforms have resulted in a robust GDP, averaging around 6-7% per year over the past two decades. (Forbes India). This growth has been a key driver of poverty reduction with Rural poverty decreasing from 25.7% in 2012 to 7.2% in 2023, while urban poverty fell from 13.7% to 4.6% over the same period. (Forbes India)
While the current administration has put in place various policies to make this growth a reality, we acknowledge that there is also a quite significant role the Banking industry should play. Our sector is at the heart of our economic engine providing much-needed funds for businesses to thrive. Here are some examples of what the banking sector is doing to promote economic growth and development,
He maintained that the Legacy Agenda highlights the multifaceted role of financial institutions in shaping Nigeria’s economic future. By pursuing all tenets of the agenda, I strongly believe the Nigerian banking industry would be equipped to further drive sustainable growth and contribute significantly to national development. This holistic approach not only strengthens the financial system but also supports broader economic objectives, paving the way for a more prosperous and inclusive Nigeria.
“Nigeria’s economic potentials are vast, but realizing them requires effective policies, investments, and governance. The banking industry is not only a participant in but also a driver of our nation’s economic growth and development. Let us embrace this opportunity with vision and determination by working together- private sector, government, civil society, and individuals to build a prosperous, and resilient economy for Nigeria. “
