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Nigerians Borrow N3.9tn To Survive Worsening Economy,Rising Cost of Living-Report
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
Army acquires 43 drones, wings 46 Turkey-trained personnel
The Federal Government has bolstered the Nigerian Army’s operational capacity with the acquisition of 43 Bayraktar TB2 drones, primarily for deployment in the North-West theatre of operations.
The Commander of the Nigerian Army Space Command, Brig. Gen. U.G. Ogeleka, disclosed this on Tuesday during the winging ceremony of 46 personnel trained in the operation and maintenance of the drones.
The initiative, codenamed Project Guardian, aims to strengthen military operations against insurgency and other security challenges in the region.
“Between May and September 2022, a team of 35 officers and 11 soldiers from the Nigerian Army’s routinely piloted aircraft system regiments underwent specialised training in Turkey on the operation and maintenance of the Bayraktar TB2 drones,” Ogeleka said. “The training crew included multi-piloted aircraft pilots, mission operators, avionics, and mechanical engineers and technicians.”
Out of the 46 trained personnel, 14 are multi-piloted aircraft pilots, seven are mission operators, and 23 are engineers and technicians.
Ogeleka presented 22 of the trained personnel for the winging ceremony, noting that the others are actively engaged in operational duties.
The Chief of Army Staff, Lt. Gen. Olufemi Oluyede, praised the acquisition of the drones and the training of personnel as significant steps toward enhancing the army’s professionalism and combat readiness.
“The winging of these 22 officers and soldiers as pilots and certified maintenance engineers is a morale booster for others in service,” Oluyede said. “It confirms their readiness to operate and maintain the Turkish Bayraktar TB2 drones in our inventory.”
Oluyede further revealed plans to procure additional unmanned aerial systems in the coming year to strengthen military operations across all theatres in the country.
The drones will play a critical role in addressing security challenges in the North-West, a region plagued by banditry and insurgency.
Their advanced surveillance and strike capabilities are expected to significantly enhance the Nigerian Army’s operational effectiveness.
This development underscores the government’s commitment to leveraging technology to improve national security and highlights the Nigerian Army’s drive to modernize its arsenal and build capacity within its ranks.
With more unmanned aerial systems set for acquisition, the military’s ability to conduct precise, real-time surveillance and combat operations is poised for substantial improvement.
News
Ondo Assembly mulls 10-year jail term for land grabbers
The Ondo State House of Assembly is considering a bill that proposes harsh penalties for land grabbers, including up to 10 years imprisonment for forceful entry or illegal takeover of properties.
Governor Lucky Aiyedatiwa has further reinforced the fight against land grabbing by signing an Executive Order to prohibit such activities.
The order aims to end forceful entry, illegal occupation of landed properties, and fraudulent or violent conduct related to land in the state.
To strengthen enforcement, the governor has established a Task Force to protect property rights, uphold the rule of law, and ensure a secure environment for property owners and residents.
The proposed bill also includes severe penalties of up to 21 years imprisonment for selling family land without the consent of the family head or secretary.
Hon Moyinolorun Ogunwumiju, the lawmaker representing Ondo West Constituency 1, who sponsored the bill, spoke during a public hearing on the bill
Hon Ogunwumiju assured stakeholders that the bill would improve land administration, protect landowners, attract investors, and foster peace and development in the state.
He explained that the bill sought to regulate land dealings, protect landowners and buyers, penalise encroachers, and criminalise unregistered agents.
Ogunwumiju said the bill proposed penalties of up to 10 years’ imprisonment for forceful entry or takeover of properties and up to 21 years for selling family land without the consent of the family head or secretary.
Speaker of the Assembly, Hon Olamide Oladiji, urged committee members and stakeholders to ensure the bill served the interests of the people.
He said the bill would maintain order in the state and impose necessary sanctions on offenders.
“Land grabbers pose a significant threat to property acquisition. Their activities ranging from trespassing, forceful occupation, and illegal sales of properties to multiple buyers must be confronted decisively.”
Majority Leader and Chairman of the House Committee on Rules and Business, Oluwole Ogunmolasuyi, said the bill, would benefit the society at large
Ondo Commissioner for Justice and Attorney General, Kayode Ajulo said the bill would enhance land administration and complement the executive order signed by Governor Aiyedatiwa.
Stakeholders including traditional rulers called for full implementation of the bill when signed into law.
News
FG earmarks N250bn for Lagos-Abuja rail project in 2025 budget
The federal government has made an allocation of N250 billion in the 2025 budget for the Lagos–Abuja mass transit rail project.
This budgetary investment is part of a broader plan to revitalize Nigeria’s infrastructure and stimulate economic growth.
The government’s focus on infrastructure development is rooted in the belief that it is a cornerstone of long-term economic planning.
By investing in critical infrastructure such as roads, railways, energy, healthcare, and education, the administration aims to create a conducive environment for both domestic and foreign investment.
The Lagos-Abuja rail project, in particular, is expected to have a transformative impact on the Nigerian economy.
By improving transportation connectivity between two major economic hubs, the project will facilitate the movement of goods and people, reduce logistics costs, and stimulate economic activity.
Additionally, the project is expected to create numerous jobs, both directly and indirectly, contributing to the country’s overall employment rate.
The government’s infrastructure investments are also aimed at addressing regional disparities.
By connecting different parts of the country through improved transportation networks, the administration hopes to stimulate economic growth in underserved regions, reduce poverty, and promote equitable development.
The 2025 budget signals the government’s commitment to transforming Nigeria’s infrastructure landscape.
By investing in critical projects like the Lagos-Abuja rail line, the administration aims to lay the foundation for a more prosperous and connected Nigeria.
However, the success of these initiatives will depend on effective planning, efficient implementation, and transparent governance.
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