Total
geographical distribution of credit by state increased by 1.82 percent to N18.9
trillion in the second quarter of 2020 from N18.56 trillion in the first
quarter of 2020.1 Lagos State (N14.92 trillion) accounted for
78.94 percent of the total credit. Further disaggregation shows N77.6
billion was distributed as loan for mortgages in 2019 compared to N25
billion in 2018. 220,935 individuals registered for the National Housing Fund,
representing a 33.6 percent increase from 2018. Also, N4 trillion was
distributed under the Agricultural Credit Guarantee Scheme Fund in 2019, an
increase from N2.9 trillion in 2018. The increase in credit particularly
towards the agriculture sector will not only improve the living standard of
beneficiaries but also enhance development through an increase in economic
activities and trade; alongside building the resilience of the economy by
improving the balance of payment account. However, providing loan guarantees to
borrowers can considerably increase the contingent liability of the government
with implications on its fiscal performance. As such, a cost-benefit analysis
of these credit facility programmes and other available options to boost
economic activities is required in order to determine the best approach.
November 6, 2020
Nigeria Economic Update (Issue 42)
Related
Nigeria Economic Update (Issue 27)
The
Naira strengthened against the dollar in the review week. Specifically, the
Naira appreciated by 2.7 percent to N355/$ (parallel market rate) on June 17, 2016,
following the release of the flexible FOREX policy guidelines by the CBN on
June 15, 2016. The new policy effectively adopts a single market structure
hosted at the autonomous/inter-bank market. The inter-bank trading scheduled to
commence on June 20, 2016 will be market-determined, officially eliminating the
N197/$ peg. To ensure foreign exchange liquidity, primary market dealers have
been introduced while the CBN will participate in the market through periodic interventions.