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Nigerians Borrow N3.9tn To Survive Worsening Economy,Rising Cost of Living-Report
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By Kayode Sanni-Arewa
Nigerians affected by the rising cost of living obtained credit facilities worth N3.82tn from banks as of January 2024, the Central Bank of Nigeria has stated.
An analysis of the latest monthly economic report posted on its website revealed that the total consumer credit rose by 11.9 per cent to N3.82tn in January 2024, driven, mainly, by the rise in personal loans on the back of heightened inflation.
On a year-on-year basis, the figure represented an increase of N1.41tn from N2.41tn recorded in January 2023.
It added that personal loans increased by 14.3 per cent to N3.028tn from N2.648tn in December 2023, while retail loans rose by 3.6 per cent to N794.79bn.
Personal loans also accounted for 79.2 per cent of consumer credit, while retail loans accounted for 20.8 per cent highlighting Nigerians’ struggle with unwavering inflation and waning purchasing power.
The report read, “Total consumer credit outstanding increased by 11.9 per cent to N3.82tn in January 2024, driven, mainly, by the rise in personal loans on the back of heightened inflation. A disaggregation of consumer credit revealed that personal loans increased by 14.3 per cent to N3.028tn from N2.648tn in December 2023, while retail loans rose by 3.6 per cent to N794.79bn. Personal loans accounted for 79.2 per cent of consumer credit, while retail loans accounted for 20.8 per cent. Consumer credit, as a share of total credit from ODCs, however, declined to 6.6 per cent, from 7.7 per cent in the preceding month.”
The apex bank further stated that total credit extended to key sectors of the economy increased by N13.22bn or 29.7 per cent to N57.76bn, compared with N44.54bn in the preceding month.
“Total credit extended to key sectors of the economy by other depository corporations increased by 29.7 per cent to N57.76bn, compared with N44.536bn in the preceding month. The growth was driven by the sustained increase in credit to services (25.6 per cent), industry (37.5 per cent), and agricultural sector (7.1 per cent). A decomposition of sectoral credit indicated that the services sector remained dominant, accounting for 52.1 per cent. Industry constituted 44.7 per cent, while agriculture accounted for the balance of 3.2 per cent,” the report added.
The headline inflation rate reached a 28-year high of 33.95 per cent in May forcing the apex bank to hike the interest rate consecutively to 26.25 per cent.
Nigerians have found themselves grappling with deteriorating living standards and increased economic hardships after the implementation of sweeping economic reforms by the current administration.
As a result, the country is facing its worst economic crisis in decades, with skyrocketing inflation, a national currency in free fall and millions of people struggling to buy food.
This situation has forced many citizens to seek loans as an alternative to meet their basic needs.
A study by SBM Intelligence found that 27 per cent of Nigerians across different income categories now resort to loan apps to keep up with their living expenses in the wake of record inflation.
The surge in demand for these loan apps is indicative of the severe impact of the unyielding inflationary pressures on the daily lives of Nigerians, especially those already grappling with limited financial resources.
While citizens in the informal sector patronise loan apps, civil servants turn to their employers for succour.
Meanwhile, public servants obtained credit facilities worth N6.1bn from their respective state governments within 15 months amid worsening economic hardship.
The borrowing obtained as loans and salary advances were granted to the civil servants between January 2023 and March 2024, according to an analysis of their budget implementation report obtained from the Open States website.
Further analysis showed that the workers obtained loans from 11 states to buy motor vehicles and build homes and furniture.
Our correspondent also observed that most states didn’t disburse the loans to their workers despite the budgetary allocation of their annual budget breakdown showed that civil servants in Delta State got the highest loan of N2.75bn, followed by Kano State with N1.1bn and Kebbi State with N680m.
Fourth on the list is Yobe State with salary advances worth N586.88m.
Other states including Lagos State lent N294.44m, Jigawa N244.58m, Enugu (N401.94m), Anambra (N427,200), Borno (N428,000), Kwara (N44.13m), Ogun (N8.16m).
Founders of loan companies have stated that harsh economic realities have forced more individuals to rely on more loans because of the constant rise in the cost of goods and services, especially since the removal of fuel
In a recent intetview, the Chief Executive Officer/founder of Trade Lenda, Adeshina Adewumi, said his firm’s absolute numbers had grown by 100 per cent in recent times.
He said, “The numbers have gone quite high. In terms of users, we have grown slightly over 100 per cent within this subsidy removal period, June and July.
“The increase in loans is generally across the board even though we do not focus on individuals. We focus just on businesses that need loans to grow their business, and we have seen the number grow significantly high. We have grown by over 100 per cent in the last two months. People are requesting N50,000 (the least we have seen) and as high as N5m.”
The founder of TellerOne, Olajuwon Marc, affirmed that the number of approved loans by his company had grown
He stated that in recent times, the economy has stifled businesses and the only way they could grow was to borrow more.
He said, “Things are now very expensive and the initial capital businesses have is no longer enough to buy things from the market, and they now rely on loans to survive this. We give out these loans to SMEs.”
He added, “The number of approved loans has grown to up to 70 per cent. The demand has surged to over 100 per cent. People always need loans, and the harsh economic realities now are driving this.”
While loan apps are offering a reprieve to small businesses, there are still plenty of issues that only serious government action can solve.
News
NCC hosts 185 girls on ICT industrial excursion
The Nigerian Communications Commission (NCC) has supported the Federal Government’s Girls in ICT empowerment initiative by hosting 185 students on an industry excursion.
NCC Director of Public Affairs, Nnenna Ukoha, disclosed this in a statement on Sunday in Abuja.
She said the tour was designed to inspire digital skills development and encourage future careers in technology.
The initiative was championed by the Ministry of Communications, Innovation and Digital Economy.
The programme aims to equip young Nigerians, particularly girls, with digital knowledge and relevant technology skills.
Ukoha said participants were selected by the ministry from across the country’s geopolitical zones.
She said the students were chosen for a competition promoting digital inclusion and greater participation of girls in Information and Communication Technology (ICT).
According to her, some participants were also drawn from Science, Technology, Engineering and Mathematics (STEM) disciplines.
“The visit to the Commission formed part of activities organised by the Ministry under the National Girls in ICT Programme.
“It is an initiative aimed at bridging the gender gap in technology through digital skills, mentorship opportunities and exposure to innovation,” she said.
Ukoha said participants learned about developments in telecommunications from 1886, when colonial authorities established communication facilities for administrative purposes.
She said the students were also introduced to the history of telegraph services linking Lagos with West Africa and Europe through submarine cables.
According to her, the tour highlighted the telecommunications landscape at Independence in 1960.
She said Nigeria then had only 18,724 telephone lines serving an estimated population of about 40 million people.
“The students were also briefed on post-Independence development plans and the operations of the former Department of Posts and Telecommunications.
“They also learned about Nigerian External Telecommunications Ltd. and the establishment of NITEL in 1985,” she said.
Ukoha said NITEL was created to coordinate internal and external telecommunications services across the country.
She noted that a major attraction during the visit was the display of historical artefacts preserved at the NCC Museum.
Among the exhibits were a Post Office Counter and Sorting Racks introduced in Lagos in 1852.
Other artefacts included the Grand ‘T’ Key used in the nineteenth century Lagos Post Office.
The collection also featured leather mail bags from 1863 and Drop Bag fittings from the late twentieth century.
Students viewed a 511A Letter Scale, an Improved Dynamometer Scale, telegram machines and the Teleprinter T100.
Additional exhibits included a Cordless PBX system, Digital Card Phone and other communications equipment.
Speaking during the tour, NCC Executive Vice Chairman, Dr Aminu Maida, said the initiative aligned with the Commission’s digital literacy objectives.
Represented by Director of Research and Development, Babagana Digima, Maida said the museum linked past and present generations.
He said the experience would help young people appreciate the sector’s transformation from analogue systems to the digital age.
According to him, understanding telecommunications history would inspire participants to contribute to future innovation.
Maida said exposing young people to technological advancement was essential for developing leaders for Nigeria’s digital economy.
“The whole idea is to engage the younger generation and show them what communication is all about.
“This museum preserves the history of communications and showcases the evolution from postal services to telegraphy and digital technology.
“We want to spark the curiosity of young people and help them understand how far the sector has progressed.
“When they see the past and the present, they can imagine the future and contribute to shaping it,” he said.
During the tour, NCC officials guided participants through exhibits documenting key milestones in Nigeria’s telecommunications history.
The students also explored the evolution of the communications sector and its contribution to national development.
News
Middle East conflict: Israel Launches Retaliatory Strikes on Iran in renewed violence
Israel has launched airstrikes on Iran in retaliation for waves of missiles fired at its northern regions on Sunday.
The development marked a day of renewed violence in the Middle East after a fragile ceasefire.
Iranian state television reports that the sound of explosions was heard in Isfahan, Karaj, Tabriz and Tehran.
The strikes occurred after Iran’s Islamic Revolutionary Guard Corps, IRGC, said it had targeted the Ramat David Airbase in northern Israel with ballistic missile fire on the evening of June 7.
The IRGC claimed that Israel used air-launched ballistic missiles in its attack on Monday morning.
The Israel Defense Forces, IDF, said it identified missiles fired from Iran toward northern Israel and defensive systems are operating to intercept the threat.
“A short while ago, the Israeli Air Force struck military targets belonging to the Iranian terror regime in western and central Iran,” the Israeli military stated.
News
If a Thief Tells You to Go to Court, His Brother Is the Judge — Jonathan
Ex- President Goodluck Jonathan has criticized what he described as a growing culture among some government institutions of dismissing public concerns by directing aggrieved citizens to seek redress in court.
Speaking at a recent public event, Jonathan expressed concern over what he called declining standards in public institutions and the increasing tendency of officials to rely on the judiciary whenever allegations of wrongdoing are raised against them.
The former president cited an East African proverb to illustrate his point, saying, “If a thief tells you to go to court, he knows that his brother is the judge.”
According to Jonathan, the saying reflects public perceptions that some individuals who engage in wrongdoing may have confidence in receiving favorable outcomes through compromised systems.
“We see government institutions doing the wrong thing and telling people to go to court,” Jonathan said. “There is this saying in East Africa that if a thief tells you to go to court, he knows that his brother is the judge.”
His remarks come amid ongoing debates over accountability, transparency, and public trust in government institutions, with critics frequently raising concerns about the handling of political and administrative disputes through the judicial process.
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