Four Banks Loan Nigerian Government N2.8Trillion In Two Years

Share this:

A review of budget performance reports of states shows that the governments are heavily relying on domestic sources for their loan needs.

A review of financial statements of banks has shown that the Nigerian government (local, state and federal government) borrowed the sum of N2.8 trillion from four banks between 2022 and 2023.

The review shows that in 2023, governments at different levels accounted for 12.4% of the N7.06 trillion loans given by the Zenith Bank in the fiscal year, representing N875 billion in total.

In 2022, the bank loaned out 12.9% of its total N4.12 trillion portfolio to the government, totalling N531 billion granted to the government as loans.

In 2023, the United Bank for Africa PLC gave a total loan of N509.6 billion to the government, this is given that 9.1% of its total N5.6 trillion loan amount was granted to the government.

In 2022, 11.4% of loans of N3.4 trillion disbursed by the United Bank for Africa went to the Nigerian government. This would mean that a total of N531 billion was granted to the government as loans in this fiscal year.

As of the financial year 2023, a total loan figure of N52.2 billion was obtained by the Nigerian government from the Guaranty Trust Bank.

Based on the financial records for the half year 2022, the sum of N58 billion was borrowed by the Nigerian government.

The government also borrowed N386.1 billion from Access Bank in the first six months of 2022.

Nigerian Government Defaults In Loan Responsibility

READ ALSO:  Tinubu Appointed Central Bank Governor With ‘Patch-Patch’ CV For Nigeria –Former SGF, Lawal

Further review shows that 0.18% of the N310 billion non-performing loans recorded by the Zenith Bank can be blamed on the government for the 2023 fiscal year.

Another 0.27% of the N177.3 billion non-performing loans in the 2022 financial year for Zenith Bank was also incurred by the government.

The same fate befell Guaranty Trust Bank when the government was responsible for 2% of its non-performing loans in 2023 and 4% in 2022.

A non-performing loan (NPL) is a loan that is in default because the borrower has not made the scheduled payments for a specified period.

A review of budget performance reports of states shows that the governments are heavily relying on domestic sources for their loan needs.

Recently, the Central Bank of Nigeria revoked the license of the Heritage Bank, citing its poor financial performance.

Non-performing loans have been identified as a major problem that hampers banks’ financial capacity and ability to stay afloat.

Already, there are concerns about the loan profile of Nigerian states, a development that continues to be spurred by large disbursement of loans to the government by Nigerian banks.

Share this:

Be the first to comment

Leave a Reply

Your email address will not be published.


This site uses Akismet to reduce spam. Learn how your comment data is processed.