The total volume of the loan availed to the private sector increased to N19.87 trillion in the third quarter of 2020 (Q3 2020) from N18.82 trillion in second quarter of 2020 (Q2 2020), representing a growth of 5.58% QoQ and a growth of 22.3% (YoY) compared to the third quarter of 2019 value of N16.25trillion.
This is contained in the Banking Sector Report recently released by the National Bureau of Statistics (NBS).
Out of this loan value in Q3 2020, Oil & Gas contributed 18.8% with a credit allocation of N3.74 trillion, followed by Manufacturing 15.3%, and an allocation of N3.03trillion.
The Mining & Quarrying and Education sectors had the least contributions of N11.46billion (0.1%) and N72.99 billion (0.4%) respectively.
In Q2 2020 and Q3 2019, Oil & Gas and Manufacturing accounted for 35.5% and 36.6% of Credit allocation to Private sector respectively.
Other Key highlights
- The Oil & Gas sector as at Q3 2020 increased by 3.3% QoQ, from N3.62 trillion in Q2 2020 to N3.74 trillion in Q3 2020. It also increased by 10%, YoY, from N3.39trillion in Q3 2019.
- The Manufacturing sector as at Q3 2020 declined by 1.3% QoQ, from N3.07 trillion in Q2 2020 to N3.03 trillion in Q3 2020 but increased by 18% YoY, from N2.57 trillion in Q3 2019.
- The Mining and Quarrying sector as at Q3 2020 declined by 4.2% QoQ, from N11.96 trillion in Q2 2020 to N11.46 trillion in Q3 2020, but increased by 0.4% YoY, from N11.42 trillion in Q3 2019, consistently contributing 0.1% of the credit allocation during these periods.
- The Education sector as at Q3 2020 increased by 6.5% QoQ, from N68.52 trillion in Q2 2020 to N72.99 trillion in Q3 2020 and by 26% YoY, from N57.95 trillion in Q3 2019, consistently contributing 0.4% of the credit allocation during these periods.
Why this matters
The current loan allocations to both Mining & Quarrying and Education sectors are quite low, considering the huge potentials and mileages that can be achieved through them for the economic growth of the country.
Besides the crude oil, the optimal exploitation of the huge mineral deposits in Nigeria could also generate huge revenue from exports – an enormous wealth of opportunities that could turn around the financial situation of the nation.
Nigeria is endowed with a wealth of extractable solid mineral reserves across the 36 states of the federation and the FCT. Some of these minerals are coal, gold, lead-zinc, iron ore, uranium, limestone, gypsum, copper, marble, columbite, granite, clay, glass sand, gemstones, barite, tin, talc, bitumen, etc. which can be exported to other nations of the world.
Importantly, education is a crucial sector in any nation which should be given a top priority. Being a major investment in human capital development, it plays a critical role in long-term productivity and growth of the economy, both at micro and macro levels.