Would you like to receive notifications on latest updates of the following headlines?

Manufacturing firms reduce debt burden by N1.62tn in H1 2024

POSTED ON October 21, 2024 •   BUSINESS      BY Abiodun Saheed Omodara
Factory Workers

Manufacturing companies in Nigeria successfully reduced their debt burden by N1.62 trillion between February and June 2024, according to data from the Central Bank of Nigeria’s statistical bulletin on sectoral distribution of credit by Deposit Money Banks.

This reduction reflects a significant 14.85% decline in manufacturing loans, occurring in the context of rising interest rates that have elevated borrowing costs across the economy.

In February 2024, total credit allocated to Nigeria’s manufacturing sector reached N10.88 trillion, up by N860 billion from N10.02 trillion in January. However, by June 2024, this figure had declined to N9.26 trillion, reflecting a reduction of N1.62 trillion.

This decrease highlights the sector’s challenges in coping with increased financial costs due to the Central Bank of Nigeria’s rate hikes, underscoring the significant 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 experienced a significant contraction during the same period.

In February 2024, private sector loans were reported at N61.56 trillion, but this figure decreased to N55.71 trillion by June 2024, reflecting a decline of N5.84 trillion.

This trend reflects broader financial tightening across industries, as cumulative rate increases have restricted loan accessibility.

In February, manufacturing loans constituted 17.68% of total private sector credit, with N10.88 trillion out of N61.56 trillion.

By June, this share had decreased slightly to 16.63%, with N9.26 trillion out of N55.71 trillion.

These figures indicate that while manufacturing firms remain significant borrowers, they have reduced their borrowing in response to tougher conditions.

The CBN’s decision to raise interest rates in February 2024, aimed at curbing inflation, has substantially reshaped the borrowing landscape for businesses.

The CBN, under the leadership of Olayemi Cardoso, has raised the monetary policy rate five times to combat inflation and promote economic stability.

The initial hike increased the rate from 18.75% to 22.75%, followed by subsequent increases to 24.75%, 26.25%, and 26.75%.

Most recently, in September 2024, the Monetary Policy Committee (MPC) raised the rate by 50 basis points to 27.25%.

READ ALSO
Oil Trade: Indian Refineries Turn to Nigerian Crude While Dangote Refinery Embraces US Imports
BY Abiodun Saheed Omodara August 11, 2025 0

Indian refineries are purchasing Nigerian crude, while Nigeria’s Dangote Petroleum Refinery is...

READ ALSO
States Allocate N235.58 Billion for External Debt Servicing in H1 2025, A 68.4% Surge
BY Abiodun Saheed Omodara August 11, 2025 0

In the first half of 2025, states collectively allocated approximately N235.58 billion towards meeti...

READ ALSO
Foreign Investors Pull Out N576.09 Billion from Nigerian Equities in H1 2025
BY Abiodun Saheed Omodara August 7, 2025 0

Foreign investors divested from equities totaling N576.09 billion on the Nigerian Exchange from Janu...

READ ALSO
EFCC Warns Developers: "Don't Profit from the Proceeds of Crime
BY Abiodun Saheed Omodara August 7, 2025 0

ABUJA, Nigeria - The Economic and Financial Crimes Commission (EFCC) has raised concerns about the p...

READ ALSO
Tinubu Calls for Enhanced Regional Integration to Boost West Africa's Economic Competitiveness
BY Abiodun Saheed Omodara August 2, 2025 0

President Bola Tinubu has highlighted the crucial need for enhanced regional integration throughout...

READ ALSO
Dangote Advocates Affordable Housing Solutions at Africa International Housing Show
BY Abiodun Saheed Omodara August 1, 2025 0

Dangote Cement Plc has urged stakeholders in Nigeria's housing sector to adopt affordable mass housi...

READ ALSO
NOGASA Warns of Nationwide Disruptions as Dangote Refinery Plans Direct Supply to Consumers
BY Abiodun Saheed Omodara August 1, 2025 0

The Natural Oil and Gas Suppliers Association of Nigeria has issued a warning regarding the Dangote...

READ ALSO
NBS Reports Surge in Cooking Gas and Kerosene Prices across Nigeria
BY Abiodun Saheed Omodara July 31, 2025 0

The National Bureau of Statistics (NBS) has announced a rise in the average costs of cooking gas and...

OUR CHANNELS:

Obi Critiques Nigerian Justice System Amid Double Standards in Court Treatment
BY Abiodun Saheed Omodara August 12, 2025 0

The former presidential candidate of the Labour Party (LP), Peter Obi, has criticized the court appe...


FG Launches Investigation into In-Flight Incident
BY Abiodun Saheed Omodara August 11, 2025 0

The Federal Government has initiated a thorough investigation into the release of inappropriate foot...


Iran and Iraq Entered into Security Agreement
BY Abiodun Saheed Omodara August 12, 2025 0

The leader of Iran's top security organization, Ali Larijani, is set to visit Iraq on Monday before...


Davido Gifts Wife Chioma Stunning Iced-Out Richard Mille as Wedding Surprise
BY Abiodun Saheed Omodara August 11, 2025 0

Afrobeat sensation David Adeleke, better known as Davido, has presented his wife Chioma with a lavis...


NiMet Forecasts 3 Days Thunderstorms and Rainfall Across Nigeria
BY Abiodun Saheed Omodara August 12, 2025 0

The Nigerian Meteorological Agency (NiMet) has forecasted thunderstorms and rainfall for the period...


Oil Trade: Indian Refineries Turn to Nigerian Crude While Dangote Refinery Embraces US Imports
BY Abiodun Saheed Omodara August 12, 2025 0

Indian refineries are purchasing Nigerian crude, while Nigeria’s Dangote Petroleum Refinery is...


Aviation Unions Suspended Proposed Strike - Keyamo
BY Abiodun Saheed Omodara August 11, 2025 0

The Minister of Aviation and Aerospace Development, Festus Keyamo, has declared that a planned strik...


Naira Drops 0.52% as Forex Demand Surges
BY Abiodun Saheed Omodara August 11, 2025 0

The naira had a varied performance at the official and parallel markets at the end of last week.&nbs...


States Allocate N235.58 Billion for External Debt Servicing in H1 2025, A 68.4% Surge
BY Abiodun Saheed Omodara August 11, 2025 0

In the first half of 2025, states collectively allocated approximately N235.58 billion towards meeti...


Mali Detains Soldiers in Crackdown on Alleged Coup Attempt Against Junta
BY Abiodun Saheed Omodara August 12, 2025 0

Mali has detained numerous soldiers suspected of attempting to overthrow the junta that assumed powe...


More Articles

Load more...

Menu