Operators in the nation’s manufacturing sector saw their combined debt to Nigerian banks rise to N4.19tn in January 2022.
This is as they borrowed the sum of N1.03tn between January 2021 and January 2022.
This implies that banks’ credit to the sector increased by 32.79 per cent in the one-year period from N3.16tn as of January 2021 to N4.19tn as of January this year.
According to sectoral analysis of deposit money banks’ credit by the Central Bank of Nigeria, the sector received the largest share of the credit from banks during the review period.
The Monetary Policy Committee of the CBN noted at its latest meeting held in March that the manufacturing Purchasing Manager’s Indices remained above the 50 index points benchmark in January.
The committee noted that the sustained performance in manufacturing PMI reflects the resilience of the economy in light of persistent headwinds to recovery.
It also said that while non-manufacturing PMI remained below the 50 index points in January, it rose slightly from 48.0 index points in December 2021 to 49.01 index points in January.
The communiqué issued at the end of the meeting, read in part, “The committee, however, noted that although the Manufacturing Purchasing Managers’ Index, remained above the 50-index points benchmark in February 2022, it moderated slightly to 50.1 index points from 51.4 index points in January 2022.
“This sustained positive performance in the manufacturing PMI reflects the resilience of the economy in light of persisting headwinds to the recovery.
“The non-manufacturing PMI, however, remained below the 50 index points in February 2022 at 49.0 index points, with a slight moderation compared with 49.01 points in January 2022 as legacy headwinds such as the persisting insecurity and infrastructural constraints continued to impact production and the ease of doing business in Nigeria.”
The committee expressed cautious optimism that with the sustained interventions by the apex bank in various sectors of the economy and broad fiscal support to tame these legacy structural constraints, price development would moderate as output growth improves.
However, stakeholders in the manufacturing sector have maintained that the current double-digit lending rate is unfavourable as it has a direct impact on the cost of production and the competitiveness of the sector.
In a bid to remedy the situation, the Governor of the CBN, Godwin Emefiele in November 2021, promised to provide single-digit loans to manufacturers of not more than nine per cent.
Speaking at the Nigeria International Partnership Forum in Paris, Emefiele had said, “We want to ensure that the manufacturing sector can access capital at a single-digit rate of not more than nine per cent.
“It should be easy for you (investors in manufacturing) to access credit at single digit with two years moratorium.”