CBN: Banks’ Credit to Domestic Economy Hit N18bn in February
As the prospect of an increase in bank lending activities rose last week, the Central Bank of Nigeria (CBN) has put the aggregate banking system credit to the domestic economy at the end of February at N17.724.5billion, rising by 2.6 per cent, on month-on-month basis compared with the growth of 7.1 and 0.6 per cent at the end of the preceding month and the corresponding period of 2014, respectively.
The apex bank explained that the development reflected, largely, the 2.5 per cent increase in (net) claims on the private sector.
The harmonisation of cash reserve ratios at 31 per cent had raised the optimism of industry watchers, who believed the measure would free some funds hitherto warehoused, at the apex bank, for onward lending.
However, the CBN, in its economic report for the month of February, which was posted on the bank’s website, said banking system’s credit (net) to the Federal Government, on month-on -month basis, fell by 1.6 per cent to negative N914.1 billion compared with the decline of 48.9 per cent at the end of the corresponding month of 2014, but was in contrast to the 55.4 per cent increase at the end of the preceding preceding month. The report explained that the development reflected, largely, the fall in private sector and Federal Government deposits, which more than offset the increase in deposit by deposit money banks (DMB’s) by 7.0 per cent.
Of the total deposits, the percentage shares of the Federal Government, banks
The fall in oil receipts relative to the level in the preceding month, was attributed to the decline in revenue from crude oil and gas exports, occasioned by the drop in the price of crude oil in the international market.
“Non-oil receipts (gross), at N201.12billion or 3.59 per cent of the total was 35.0 and 10.4 per cent lower than the receipts in the preceding month and the corresponding month of 2014, respectively.
“The development reflected, largely, the fall in receipts from National Information Technology Development Fund (NITDEF) and independent revenue of the Federal Government estimated retained revenue for February 2015 was N224.89 billion, while total expenditure was N363.68 billion. Thus the fiscal operations of the Federal Government resulted in an estimated deficit of N138.79 billion. Total revenue, was lower than the receipts in the preceding month and the corresponding month of 2014, by 39.8 and 26.0 per cent, respectively.
“The fall in oil receipts relative to the level in the preceding month, was attributed to the decline in revenue from crude oil and gas exports, occasioned by the drop in the price of crude oil in the international market,” the report said.