Manufacturing companies in Nigeria has reduced their debt burden by N1.62 trillion between February and June 2024.
This is according to data from the Central Bank of Nigeria’s (CBN) statistical bulletin on sectoral distribution of credit by Deposit Money Banks.
This drop, representing a 14.85% decline in manufacturing loans, comes amid rising interest rates that have increased borrowing costs across the economy.
In February 2024, the total credit allocated to the manufacturing sector stood at N10.88 trillion, which was an increase of N860 billion from N10.02 trillion recorded at the beginning of the year in January.
By June 2024, this amount had reduced to N9.26 trillion. The decrease of N1.62 trillion between February and June reflects the sector’s struggle to manage higher financial costs following the CBN’s rate hikes, underlining the impact of monetary tightening on business operations.
The first interest rate hike under the current CBN Governor, Olayemi Cardoso, was introduced in February 2024, setting a tone for stringent monetary policies to curb inflation.
The total credit to the private sector across all industries also witnessed a sharp contraction over the same period.
In February 2024, private sector loans amounted to N61.56 trillion, which fell to N55.71 trillion by June 2024—a decline of N5.84 trillion.
