CBN’s N5.6tn Soft Loans Boost Power, Manufacturing and Aviation Sectors in Three Years

The Central Bank of Nigeria (CBN) has been playing a vital role in supporting the key sectors of the economy with soft loans in the past three years, according to findings by The PUNCH.

The power, manufacturing and aviation sectors have benefited from the CBN intervention with an aggregate of N5.6tn in loans from 2020 to 2022.

The CBN loans were aimed at addressing the various challenges facing these sectors, such as inadequate power supply, low industrial capacity, high operating costs and poor infrastructure.

The loans were offered at single-digit interest rate and long repayment tenor to ease the burden on the borrowers.

The data obtained from the CBN result and accounts showed that the apex bank’s receivables and other assets in the power and aviation sector of Nigeria stood at N50.6bn in 2022, a decline of 96.4 per cent from N1.39tn in 2021. Also, in the power and aviation sector, it reported N935bn in 2020.

In the manufacturing sector, the CBN reported N1.23tn in 2022, an increase of 33.46 per cent from N919.03bn in 2021. In addition, its concentration in the manufacturing sector was at N1.07tn in 2020.

From the 2022 result and accounts, the apex bank revealed that its total receivables and others stood at N47.39tn from N43.18tn reported in 2021. Receivables from the Federal Government contributed a significant portion.

The Director-General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, said the association had made several attempts to secure credit facilities from the apex bank, but did not receive any feedback on any of the occasions it wrote to the CBN.

He said, “We have 2,500 manufacturers. We have asked the CBN which manufacturers they are supporting, so we can collaborate with them, they have not obliged us. We are a coordinated group. We work together. So, to lump us together with other sectors that have non-performing loans, I don’t understand what they are talking about.”

The CBN intervention in these sectors was part of its mandate to catalyse financing of the real sector of the Nigerian economy, in accordance with Section 31 of the CBN Act 2007. The CBN also stated that its intervention would improve power supply, generate employment, enhance living standard and attract private sector investments.

The CBN has also established other intervention funds for various sectors of the economy, such as the Nigerian Electricity Market Stabilisation Facility (NEMSF), which was floated to settle outstanding payment obligations due to market participants during the interim rules period of the market, and the Solar Connection Intervention Facility (SCIF), which was designed to provide affordable electricity to rural dwellers through long-term low interest credit facilities.

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