•As sector’s share of total  credit falls to 5.1%

By Babajide Komolafe,  Economy Editor

Banks’ lending to the agricultural sector rose by 24.2 per cent, year-on-year, YoY, to 2.6 trillion in 2023 from N1.82 trillion in 2022.

The Central Bank of Nigeria, CBN, disclosed this in its  Quarterly Statistical Bulletin for the fourth quarter of 2023 (Q4’23). The report among other things showed lower growth in banks’ lending to agric and decline in the sector’s share of total banks’ credit to the private sector.    

Vanguard analysis of data on  Deposit Money Banks’ Sectoral Distribution of Credit in 2023 showed that the 24.2 per cent growth in banks’ lending to the agric sector in 2023 represents 0.5 percentage points decline when compared to the 24.5 per cent growth recorded in 2022.

Further analysis also showed  that the  agric sector  received less share of banks’ lending to the private sector in 2023.    

In 2023, the agric sector received 5.1 per cent of  the N44.53 trillion banks’ lending to the private sector. This however represents a 1.15 percentage points decline when compared with the 6.15 per cent agric sector’s share of  the N29.44 trillion  lending to the private sector in 2022.

The lower growth in lending to the agric sector and fall in the sector’s share of banks’ lending to the private sector in 2023  mirrors the lackluster performance of the sector in 2023.  According to the National Bureau of Statistics, NBS, agric sector recorded a lower Gross Domestic Product, GDP, growth of 1.3 per cent in 2023, down from the 1.88 per cent growth recorded in 2022.  

Furthermore, the contribution of the agric sector to total GDP in 2023 fell to 25.18 per cent, down from 25.58 per cent in 2022.  

According to NBS, the agric sector recorded lower growth in nominal GDP in Q4’23.

The bureau in its GDP report for Q4’23 stated: “Four sub-activities make up the Agricultural sector – Crop Production, Livestock, Forestry and Fishing. The sector grew by 14.94% year-on-year in nominal terms in Q4’23, showing a decrease of 3.74% points from the same quarter of 2022”.