Credit to Pri­vate Sec­tor Rises to N21.425tn in Sec­ond Quar­ter

THISDAY - - BUSINESS WORLD - Obinna Chima

At N21.425tril­lion, bank­ing sys­tem’s credit to the pri­vate sec­tor grew by 13.5 per cent in the sec­ond quar­ter of 2016, com­pared the pre­vi­ous quar­ter.

The Cen­tral Bank of Nige­ria (CBN) dis­closed this in its sec­ond quar­ter 2016 eco­nomic re­port.

The de­vel­op­ment was due to the growth in claims on the core pri­vate sec­tor. Over the level at end De­cem­ber 2015, bank­ing sys­tem’s credit to the pri­vate sec­tor grew by 14.5 per cent, com­pared with the growth of 0.9 per cent and 4.3 per cent recorded at the end of the pre­ced­ing quar­ter and the cor­re­spond­ing pe­riod of 2015, re­spec­tively

Also, at N24.318 tril­lion, ag­gre­gate do­mes­tic credit (net) to the econ­omy, on quar­ter-on­quar­ter ba­sis, grew by 7.3 per cent, com­pared with the growth of 4.9 per cent and 3.8 per cent at the end of the pre­ced­ing quar­ter and the cor­re­spond­ing quar­ter of 2015, re­spec­tively.

The de­vel­op­ment, rel­a­tive to the pre­ced­ing quar­ter was at­trib­uted to the 13.5 per cent growth in claims on the pri­vate sec­tor. Over the level at end of De­cem­ber 2015, net do­mes­tic credit rose by 12.5 per cent, com­pared with the growth of 4.9 per cent at the end of the pre­ced­ing quar­ter. The de­vel­op­ment re­flected the growth in claims on the pri­vate sec­tor.

Sim­i­larly, the re­port showed that bank­ing sys­tem’s credit (net) to the fed­eral gov­ern­ment fell by 23.5 per cent to N2.893 tril­lion, in con­trast to the growth of 30.7 and 26.5 per cent at the end of the pre­ced­ing quar­ter and the cor­re­spond­ing quar­ter of 2015, re­spec­tively. The de­vel­op­ment was due to the fall in banks’ hold­ing of gov­ern­ment se­cu­ri­ties.

Rel­a­tive to the level at the end of the pre­ced­ing quar­ter, for­eign as­sets (net) of the bank­ing sys­tem, rose by 2.8 per cent to N7.105 tril­lion at end-June 2016, in con­trast to the de­cline of 1.8 per cent at the end of the pre­ced­ing quar­ter. Fur­ther­more, the de­vel­op­ment was at­trib­uted, largely, to the in­crease in for­eign as­set hold­ings of the banks, fol­low­ing the adop­tion of a flex­i­ble ex­change rate regime.

“Over the level at end De­cem­ber 2015, for­eign as­sets (net) rose by 25.7 per cent at end-June 2016, in con­trast to the de­cline of 1.8 and 14.4 per cent at the end of the pre­ced­ing quar­ter and the cor­re­spond­ing pe­riod of 2015, re­spec­tively,” it added.

At N1.685 tril­lion, cur­rency-

in-cir­cu­la­tion de­clined by seven per cent in the re­view quar­ter, com­pared with the de­cline of 2.5 per cent at the end of the pre­ced­ing quar­ter. The de­vel­op­ment was due, largely, to the de­cline in vault cash.

To­tal de­posits at the CBN amounted to N10.502 tril­lion, in­di­cat­ing an in­crease of 8.1 per cent rel­a­tive to the level at the end of the pre­ced­ing quar­ter. The de­vel­op­ment re­flected the sig­nif­i­cant in­crease in fed­eral gov­ern­ment de­posits.

Of the to­tal de­posits at CBN, the shares of the fed­eral gov­ern­ment, banks and ‘Oth­ers’ were N5.021 tril­lion (47.8 per cent), N3,687 tril­lion (35.1per cent) and N1.794.tril­lion (17.1 per cent), re­spec­tively.

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