By Elizabeth Adegbesan
Banks’ credit to the private sector of the economy rose year-on-year (YoY) by 18 per cent to N35.7 trillion in December 2021 from N30.14 trillion in the corresponding period of 2020.
Vanguard findings from the Money Statistics Data of the Central Bank of Nigeria, CBN, shows that net domestic credit also rose YoY by 16.4 per cent to N49.5 trillion in December 2021 from N42.5 trillion in 2020, signifying an uptick in economic activities.
The CBN drive towards expanding credit to the economy resulted in its policy of high Loan to Deposit Ratio, LDR, which forced banks to lend more to the private sector. Total credit to the private sector since it began this policy in September 2020 has increased significantly.
In its Macroeconomic Review and outlook for Nigeria in 2022, the FSDH Research stated: “We believe that the MPC (CBN’s Monetary Policy Committee), in a bid to sustain economic recovery, will continue to favour economic growth over inflation targeting by further expanding credit to the private sector.”
Meanwhile, currency in circulation stood at N3.3 trillion in December 2021, representing a 13.7 per cent rise when compared with N2.9 trillion in December 2020.