Data from the Central Bank of Nigeria (CBN) has revealed a significant drop in Nigerian banks’ lending to both the private and public sectors during the month of March. The data analysis indicates that borrowings to the private sector decreased to N71.21 trillion in March 2024, compared to N80.86 trillion in February, representing a notable difference of N9.65 trillion. Similarly, lending to the public sector saw a reduction of N14.34 trillion or 42.3 percent, dropping to N19.59 trillion in March from N33.93 trillion in February 2024.
This decline comes amid an economy that had shown signs of improvement, with credit to the private sector escalating by 66 percent compared to the same period in 2023. In January 2024, credit reached N76.29 trillion, a substantial increase from N41.54 trillion in January 2023. This upward trend continued into February, peaking at N80.86 trillion. However, the sharp decline witnessed in March reflects a significant shift from the previous year, marking a 29 percent decrease compared to 2023.
Government credit also experienced fluctuations, starting at N36.18 trillion in January 2024, up from N26.64 trillion in January 2023. Despite this initial increase, subsequent months saw variable reductions, culminating in the substantial drop observed in March.
Analysts say the reasons behind this decline in lending are multifaceted and could include changes in economic conditions, regulatory policies, and market dynamics.
