Nigeria Economic Update Issue 33
Financial Sector The financial sector data on sectoral allocation of credit, depicts a marginal quarter-over-quarter decline in terms of private sector credit. Comparatively, banks’ allocated credit stood at N15.71 trillion in 2017Q21, a slightly 2 percent decrease from N16 trillion allocated in 2017Q12. The slight decline may have been driven by the marginal fall in credit allocation to Agricultural sector (from 3.5 percent to 3.2 percent Quarter-over-Quarter). However, further disaggregated data shows that Oil and Gas sector received the highest credit allocation (22.5 percent), followed by manufacturing sector (14.1 percent) during the quarter. Notably, the short-term strengthened activities and improvements in the aforementioned sectors, may have triggered the need for the larger share of credit allocated to them in the review quarter. Going forward, given the diversification agenda of the government from oil, deposit money banks should be encouraged to scale up credit facilities to the real sectors of the economy especially agriculture and manufacturing in order to boost domestic production and improve the supply side of the economy.