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.
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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.
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