Mrs Ngozi Okonjo
Banking sector credit to the private sector increased by 1.28 per cent to N15.127 trillion in October 2012, data obtained from the Central Bank of Nigeria (CBN) has revealed.
The amount represented a slight growth by N192 billion, compared to the N14.935 trillion recorded in September.
The central bank’s economic indicator also showed that Narrow Money (M1), which includes all physical monies such as coins and currency along with demand deposits and other assets held by the central bank, increased to N6.541 trillion in October, as against the N6.391 trillion it was as at September.
Also, broad money (M2), which generally is made up of demand deposits at commercial banks and monies held in easily accessible accounts, increased to N14.064 trillion in October, from N14.064 trillion it was as at September.
The data also showed that while credit to government improved slightly to N1.591 trillion in the month under review, from N1.485 trillion as at September, demand deposits also jumped to N5.387 trillion in the month under review, from N5.321 trillion as at September.
However, the Monetary Policy Committee (MPC) communiqué last week showed that aggregate domestic credit (net) declined by 3.48 per cent in October.
The MPC stated that the decline in credit to government between June and October implied that the Federal Government was increasingly becoming a net creditor to the banking system.
The committee further said: “The impact of better fiscal management including the introduction of Treasury Single Account.”
It added: “Interest rates in all segments of the money market moderated between September 19 and October 30, 2012, reflecting increased liquidity in the banking system induced by the release of statutory revenue to sub-national governments, the repayments of matured CBN bills and absence of repo operations during the review period.
“The interbank call and Open Buy Back (OBB) rates, which opened at 16.77 and 16.40 per cent on September 19, 2012, closed at 12.03 and 11.70 per cent, respectively, on October 30, 2012. The average interbank Call and OBB rates for the period were 11.68 and 11.38 per cent, respectively.”
CBN Governor, Mallam Sanusi Lamido Sanusi, last week stressed the need to ensure that more funds slow into the rural areas and less of it into Abuja and other state capitals, so as to lift a lot of people out of poverty.
He also challenged banks to “take certain risks,” saying “it is not enough to say that you (bank) are afraid of a sector and basically don't want to have any kind of experience.”