The total amount of non-performing loans (NPL) of Nigerian banks declined for the year 2018, relative to 2017. At N1.79 trillion, the stock of NPL fell by 24.2 percent from N2.36 trillion in 20171. Also, gross loans as of the end of 2018 stood at N15.35 trillion, as against N15.96 trillion as at the end of 2017. The reduction in NPL shows that debtors may have relieved more of their indebtedness in 2018 compared to 2017; this may have been complemented by the Asset Management Company of Nigeria’s (AMCON) resolve to achieve its recovery mandate against erring debtors2. AMCON is saddled with the statutory responsibility, among others, of recovering the NPL hitherto disbursed by eligible banks to their customers. The decline in non-performing loans is expected to continue as the overconcentration of banking sector loans to the unpredictable and volatile oil and gas sector has been reduced to a great length. Monetary authorities should tighten mechanisms to ensure that commercial banks strictly adheres to the macroprudential guidelines that stipulate a 5 percent NPL benchmark.
Macroeconomic Report & Economic Updates
March 15, 2019
Nigeria Economic Update (Issue 8)
The total amount of non-performing loans (NPL) of Nigerian banks declined for the year 2018, relative to 2017. At N1.79 trillion, the stock of NPL fell by 24.2 percent from N2.36 trillion in 20171. Also, gross loans as of the end of 2018 stood at N15.35 trillion, as against N15.96 trillion as at the end […]
Read →
Related
Nigeria Economic Update (Issue 8)
Recent
data from the National Bureau of Statistics (NBS) show that total capital
importation in 2015 fell steeply by 53.5 per cent from $20,750.76 million in
2014 to $9,643.01 million in 20152. This decline was largely driven
by a substantial drop in portfolio investment (the largest component of Capital
Inflows), which fell by 59.74 percent. The exclusion of Nigeria from the JP Morgan
EM Bond index, the slump in crude oil prices, the decision of the US Federal
Reserve to raise interest rates and the capital control measures imposed by the
Central Bank of Nigeria (CBN) are the notable drivers of the reduced inflow of
capital. Going forward, improving the business environment, especially easing
foreign exchange controls, would determine the extent to which the economy can
attract increased capital inflows.