The oil and gas sector received 31.1% of banks’ credit allocation in Q3 2024 –CBN

In the third quarter of 2024, the oil and gas sector secured 31.1% of Nigeria’s total credit allocation from deposit money banks (DMBs), marking a notable increase from the previous quarter’s 29.9%. This figure highlights the sector’s ongoing dominance within the financial landscape. In contrast, the manufacturing sector saw a decline in credit allocation by 6%, while the financial and insurance sector experienced a robust 22% increase.

Despite this growth in overall bank credit, the agriculture sector continued to face challenges, receiving a small share of just 4% of total loans. The general services sector also saw a 9% decrease in credit allocation. Overall, DMBs extended N58.6 trillion in credit, reflecting a 5.1% quarterly increase, although this was a moderation compared to the significant 19.5% surge earlier in the year.

Experts have attributed the deceleration in credit growth to the cautious approach of DMBs in the face of rising non-performing loans (NPLs) and a high-interest-rate environment. The NPL ratio rose to 4.58% by the end of Q3 2024, up from 3.9% in June. Analysts also anticipate continued tight financial conditions throughout 2025, with the Central Bank of Nigeria maintaining restrictive monetary policies to curb inflation.