Amid challenges, manufacturers’ debt to banks hits N6.9tr in H1’23, CBN report reveals

Amid a headwind of challenges ranging from multiple taxation, forex scarcity, and low patronage of locally produced goods, the debt owed by manufacturers to banks in the country has hit N6.98 trillion in the first half of 2023.

The figure rose from N5.56 trillion in January 2023 to N6.98 trillion by June 2023 signifying N1.42 trillion increase.

The figure also rose y-o-y from N4.53 trillion in June 2022 to N6.98 trillion in June of the current year figures from the CBN’s Sectoral Analysis of Deposit Money Banks’ Credit report.

A month-by-month analysis of lending reveals the following figures: N5.56 trillion in January, N5.57 trillion in February, N5.65 trillion in March, N5.81 trillion in April, N5.70 trillion in May, and N6.98 trillion in June 2023.

The report stated, “The projection for the Net Domestic Credit, though on the upward trajectory, reflects the expected credit dynamics in the economy. Credit to the Government is expected to decrease over the period due to the expected significant reduction in fiscal deficits arising from the removal of fuel subsidy.

READ ALSO:Experts upbeat CBN’s clearing of FX backlog will strengthen naira, boost liquidity

On the other hand, credit to the private sector is expected to increase owing to the government’s plan to achieve a higher level of growth driven by the private sector,”

With the mounting debt, stakeholders in the manufacturing sector have consistently argued that the current double-digit lending rate is unfavourable, as it directly impacts the cost of production and the competitiveness of the sector.

It would be recalled that MAN President, Otunba Francis Meshioye, in his welcome address at the Adeola Odutola Lecture for the 51st Annual General Meeting of the association, held recently pinpointed the high cost of borrowing as one of the challenges militating against the sector’s growth.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now