By Babajide Komolafe & Elizabeth Amihor
Governor, Central Bank of Nigeria, CBN, Mallam Lamido Sanusi said that the various reform measures in the banking sector are designed to enhance the growth of the real sector.
In a keynote address at the at the 4th Memorial Lecture of the Clement Isong Foundation for 2012, Sanusi said that on one of the impact of the reforms is increased flow of credit to the real sector of the economy, which has enhanced the growth of the sector.
Sanusi who was represented by the Deputy Governor, Corporate Services, Alhaji Suleiman Barau, said that, “Total credit to economy stood at N13, 407.4 billion at end-April 2012 and averaged N10, 300.4 billion between December 2008 and April 2012, which is higher than the average of N2,747.02 billion recorded in the 2004-2007 period.
“The growth in credit to the private sector reflected improved credit flow by the banking system emanating from the various reforms on the sector. Of the total credit to the core private sector, the share of the agricultural sector averaged2.1 per cent, while manufacturing and solid mineral got an average of 12.5 and 14.9 per cent, respectively between 2007 and April 2012.
Similarly, the share of real estate, utilities and communications in total credit to the economy by the banking sector averaged 8.0, 0.7 and 10.7 per cent, respectively during the period.
“Clearly, while the share of bank credit to non-agricultural sectors has improved over time, banking system’s credit to the agricultural sector is comparably small, indicating the risk perception and/ or lack of interest in the sector by the banks.
What is clear however is that the growth of credit to the real sector, though still relatively not very impressive, has been rising over time and it is expected to improve further as the effects of the current reforms permeate the banks.
“Similarly, the performance of the real sector in the face of the banking sector reforms.