‘Banks’ loans hit N33tr in 12 months’
Macroeconomic and Fixed Income Researcher at FBNQuest, Gregory Kronsten has listed the macroeconomic impact of the Covid-19 pandemic on the population.
In a report, he said one bright spot has been the 21 per cent increase in the loan books of deposit money banks over 12 months to N3.3 trillionHe said: “As well as leaning on the banks to boost lending as their regulator, the Central Bank of Nigeria has also multiplied and deepened its own credit interventions over the period. The beneficiaries are not identifying themselves and probably include few SMEs, yet the increase should help businesses in their hour of need,” he said.
It also said the Nigeria Bureau of Statistics data shows a better-than-expected return to work after lockdown, particularly in rural areas. Most returnees work in agriculture and non-farm household firms. However, respondents are returning to companies with a fall in revenue relative to pre-COVID and with magnified operating challenges. Farmers have generally reduced the area planted to crops. There are large gaps in the safety nets of many households.
“Closing with the impact of the virus on inflation, there are downward pressures such as a further weakening in consumption patterns due to the lockdown. However, there are also upward pressures such as the shutdown of factories and general supply chain disruptions. Our take is that the headline rate will see a further modest rise to 13.1 per cent year-on-year at year-end 2020 from 12.6 per cent in June.
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