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CBN increases LDR to 65%, sets December deadline 

The CBN has issued a fresh circular mandating commercial banks operating in the country to lend out up to 65% of their customer deposits.



CBN, Key lending rate, CBN to boost creative industry with N22 billion , CBN increases LDR to 65%, sets December deadline, External reserves drop by $3.2 billion in Q3’19 , Banks' loans to Oil and Gas, Power, other sectors drop by N411.8 billion 

The Central Bank of Nigeria (CBN) has issued a fresh circular mandating commercial banks operating in the country to lend out up to 65% of their customer deposits. 

In a new circular addressed to all banks obtained by Nairametrics, the CBN disclosed that the minimum Loan to Deposit Ratio (LDR) target for all Deposit Money Banks (DMBs) has been reviewed upward from the initial 60% to 65%.  

[READ MORE: CBN to boost creative industry with N22 billion]

A new LDR: According to the information contained in the circular titled: ‘Regulatory measures to improve lending to the real sector of the Nigerian economy’, the major reason cited by the CBN for the newly revised LDR is the noticeable “growth in the level of the industry gross credit”. 

  • For instance, the apex bank stated that the industry gross credit increased by N829.4 billion or 5.33% from 15.5 trillion at the end of May 2019 to N16.3 trillion as at September 26, 2019. 
  • The CBN, therefore, disclosed that the LDR was reviewed upward in line with provisions of the earlier circular and in order to sustain the momentum.

The Deadline:  Also, the CBN has set a new date as the ultimatum for banks to comply with the new 65% LDR. Recall the initial target set by the apex bank was September 30th, however, it stated that all DMBs are to now attain a minimum LDR of 65% by December 31 2019. 

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  • According to the circular, to encourage SMEs, Retail, Mortgage and Consumer Lending, these sectors shall be assigned a weight of 150% in computing the LDR for this purpose. 
  • It was further disclosed that failure to meet the new minimum LDR by December 31st shall result in a levy of additional Cash Reserve Requirement equal to 50% of the lending shortfall implied by the target LDR.  

The CBN also stated it shall continue to review developments in the market with a view to facilitating greater investment in the real sector of the Nigerian economy whilst promoting a safe, sound and resilient financial system.   

A quick checkIn an article published on Nairametrics in July, the CBN, through a circular, mandated commercial banks operating in the country to lend out up to 60% of their customer deposits. 

  • Nairametrics also stated that with the new policy, anyone could get a loan at this rate. 
  • At the same time, Non-Performing Loans stood at N1.69 trillion as of March 2019. The data also revealed that commercial banks had a total deposit of about N27 trillion out of which about N15 trillion or 55.5% was money lent to the private sector.
  • However, the latest banking sector data released by the Nigerian Bureau of Statistics (NBS) shows that Non-Performing Loans dropped to a 4-year low in June 2019 (N1.44 trillion). Also, credit to the private sector rose to N15.4 trillion.  

Experts have raised concerns that initial 60% LDR would expose banks and skyrocket the Non-Performing Loans. Despite this, the CBN has revised LDR to 65% and banks are expected to brace up.  

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[READ ALSO: CBN Cashless Policy: Reps eye reversal]

Following the latest development, while companies and businesses with strong cash flows and collateral will have significantly higher chances of obtaining loans, banks will also have to invest heavily on strategies that can help mitigate against lending risk 



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Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Nigeria to fix irregular power supply in 40 years- Senate

Four decades is needed due to underfunding and the FG’s failure to fix the challenges of electricity generation.



Customers to pay for metering through cost of tariff- NERC

The Nigerian Senate has said that it will take Nigeria 40 years to fix irregular power supply.

This was disclosed by the Senate Committee on Power on Tuesday after the Minister of Power and his team made a presentation to the Committee, according to Guardian.

The four decades wait, according to the lawmakers, is due to underfunding and the Federal Government’s failure to fix the challenges of electricity generation.

The committee was astonished by the submission of the Minister of Power, Mamman Saleh, that of the N165billion required for capital projects in 2020, N4billion was given as bribe of which only N3billion was cash-backed.

In lieu of this, the Committee dismissed claims made by the minister over raising hope on early provision of constant power supply, while Managing Director of the Transmission Company of Nigeria (TCN), Sule Ahmed Abdulaziz, painted a gloomy picture during the ministry’s budget defense.

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A member of the Committee, Danjuma Goje, expressed concern that based on Abdulaziz’s presentation, N165billion was proposed, but the ministry gave N4billion in envelope, insisting that it would take 41 years to deliver constant electricity when N165billion is divided by N4billion.


Recall that Nairametrics had earlier reported that it will take nothing less than $100 billion to enable stable power supply in Nigeria.

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What they are saying

Mr. Danjuma expressed pessimism over hopes of stable power supply in the country. He went as far as stressing that even if ongoing projects are being completed there is still no hope for stable transmission of power in the country.

Mr. Danjuma was quoted as saying: “Going by the minister’s presentation that transmission gas increased from 5000 to 8000 megawatts, it is not enough. When dishing out figures, we should bear in mind that capacity, transmission, and distribution have increased and that Nigerians, manufacturers, and industrialists want to see stable electricity.

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#EndSARS: ECOWAS calls for protesters to remain peaceful in their demonstrations

ECOWAS has called on protesters to be peaceful in conducting their protests.



ECOWAS ministers recommend gradual re-opening of borders 

The Economic Community of West African States (ECOWAS), has called on protesters to be peaceful in conducting their protests and urged Nigerian security operatives to exercise restraint in the handling of protests.

This was disclosed in a statement by the organization on Tuesday and comes on the heels of statements by other International bodies and personalities, who have expressed worry over the nature of brutality meted on protesters, especially after the Lekki shootings.

“ECOWAS Commission notes with concern that demonstrations by Nigerian youth calling for Police reforms, particularly the abolition of the Special Anti-Robbery Squad (SARS) of the Nigerian Police force, accused of misconduct by those demonstrating, have turned violent,” they said.

The body said it recognizes the right to peaceful protests and also called for protesters to be peaceful, due to the rising reported cases of lootings post protests during the curfews.

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While ECOWAS recognizes the right of citizens to freedom of expression and peaceful assembly and protests, it also wishes to stress that those rights should be exercised in a nonviolent manner.

“In this regard, ECOWAS calls on all protesters to remain peaceful in the conduct of their demonstrations. It also urges the Nigerian security operatives to exercise restraint in the handling of the protests and act professionally.”


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The tone of ECOWAS’ message is different compared to the rest of other stakeholders including the statement of the Lagos State Governor, House of Reps Speaker, and the Vice President, who all acknowledged that the protests were peaceful and the protesters were attacked and that the violence from the curfews was not done by the protesters but by hoodlums.

The ECOWAS message is also the first statement by West Africa’s most important regional body since the #EndSARS protests started in the first week of October.

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Economy & Politics

Kano State presents N147.9 billion budget for 2021 fiscal year

Governor Ganduje has presented the total sum of N147.9 billion as Kano State’s proposed budget for 2021 fiscal year.



Dala Inland Dry Port set to take off after N2.3 billion investment - Kano Govt., DB to support 1.26 million farmers with $95 million

Kano State Governor, Abdullahi Ganduje has presented the total sum of N147.9 billion as its proposed budget for 2021 fiscal year before the Kano State House of Assembly today.

Presenting the budget tagged “Budget for Economic Recovery and Sustainable Development,”Governor Ganduje said the budget is in furtherance of his administration’s vision for diversification of the state sources of revenue which will engineer development in the future.

Backstory: Recall that Nairametrics had earlier reported the drive and optimism by Kano State government to boost its Internally Generated Revenue. This might probably explain why IGR increased by almost 10% between 2020 allocations and proposed estimates for 2021.

What you should know: The breakdown of the budget verified by Nairametrics showed the following key highlights:

  • The total budget increased by approximately 7.0% from N138.279 billion in 2020 to N147.935 billion in 2021.
  • Capital expenditure for the periods under view increased by 10.93% from N60.485 billion to N67.095 billion.
  • Recurrent expenditure also increased from N77.79 billion to N80.839 billion, indicating a 3.92%. increase for the periods under view.
  • Internally Generated Revenue (IGR) increased by approximately 10% from N24 billion to N26.395 billion during the period under view.
  • A breakdown of the budget showed that the Education sector has over N37 Billion representing 25% of the total budget while the health care delivery service has over N25 Billion representing 17% of the total budget.

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