Nigerians borrow N3.9tn as economic crisis bites harder

Amid rising living costs, Nigerians obtained N3.82tn in credit from banks by January 2024, driven by heightened inflation. Personal loans, comprising 79.2% of consumer credit, rose by 14.3%. Total sectoral credit increased to N57.76bn, benefiting services, industry, and agriculture. With inflation at a 28-year high of 33.95%, many Nigerians, including public servants, are turning to loans to meet basic needs. Loan app usage surged, reflecting the severe economic impact, especially after the removal of fuel subsidies. Source: Punch

Our Review
The rise in consumer credit facilities in Nigeria, reaching N3.82tn as of January 2024, reflects the severe economic hardship faced by Nigerians due to persistent inflation and naira devaluation. With personal loans making up 79.2% of consumer credit, this trend highlights the reliance on credit to meet basic needs. The agricultural sector, though receiving increased credit (7.1% growth), needs more significant investment to boost productivity and mitigate the impact of inflation.
To foster growth in the agri-food value chain, strategic investments in agricultural infrastructure, technology, and training are crucial. Enhancing access to affordable credit for farmers and agribusinesses can improve production and reduce food prices. Policies should focus on stabilizing the naira, controlling inflation, and ensuring efficient budget utilization for agricultural projects. Collaboration between financial institutions, government, and the private sector can drive sustainable growth.
For informed decisions, stakeholders must analyze credit trends, monitor budget performance, and implement targeted interventions. This approach can alleviate economic pressures, enhance food security, and support small-scale farmers and businesses.