Credit to private sector hit N26.7tn in 2019 –LCCI

The Lagos Chamber of Commerce and Industry (LCCI) has declared that the total credit granted to the private sector rose to N26.69 trillion in 2019, up from N18.72 trillion in 2015 while a modest improvement was recorded in prime lending rate, which stood at 14.99 points in 2019 as against 16.96 points in 2015.

Muda Yusuf, the Director-General of the LCCI, made the disclosure in a statement titled “Nigeria Democracy at 21” released on Sunday, saying the maximum lending rate was 26.84 points in 2015 relative to 30.72 points in 2019.

LCCI noted that as Nigeria commemorated its 21st year of return to democracy, the cost of credit still remained a challenge for businesses, especially Micro, Small and Medium-sized Enterprises (MSMEs).

The chamber undertook a performance review of the economy in 2015 against 2019, which demonstrated that Nigeria’s macroeconomic fundamentals, such as the Gross Domestic Product, Foreign Direct Investment, foreign exchange rate and lending rate, were largely weak and the situation remains the same till today.

It linked the moderate improvement in foreign reserves within the period to favourable oil prices and ascribed the improvement in credit to the private sector and prime lending rate to the aggressive move by monetary authorities for robust credit flows into the economy.

Yusuf observed that Nigeria’s 21 years of uninterrupted democracy has earned the country profound goodwill as one of the few stable democracies on the continent. He said the goodwill had rubbed off on the economy given that investors were more comfortable with a democratic environment.

“However, core democratic values are yet to take firm root in the Nigerian democracy, especially in quality and independence of democratic institutions; separation of powers and the inherent Checks and balances, accountability by the political leadership, transparency in the management of public finance, rule of law, among others.

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“We recognise that Nigeria’s democracy is still work in progress, but it is crucial to recognise the importance of these democratic ideals in the sustenance of our democracy.

“It is remarkable as well that the military has, over the last 21 years, demonstrated absolute loyalty, respect and submission to the constituted democratic authorities. This has earned Nigeria a great deal of respect in the comity of nations.”

Yusuf said the worsening level of poverty in the country posed a considerable threat to Nigeria’s democratic process and security.

LCCI derived its sources from the Central Bank of Nigeria, the National Bureau of Statistics (NBS), the Debt Management Office, the Nigerian Stock Exchange, among others.

Citing data from the NBS, the World Bank and Oxfam, LCCI stated that the current administration’s performance, from a socioeconomic and welfare viewpoint, was not satisfactory.

“The data on trends in per capita income, poverty, unemployment and food inflation support this position. Per capita income fell steadily between 2015 and 2018.

“Although data set ended in 2018, judging from present realities, GDP per capita fell further in 2019 as population growth rate (estimated at 2.7 per cent) exceeded GDP growth (2.27 per cent) in 2019,” it said.

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