Banks lend N1.2 trillion to the construction industry – CBN

Operators in the country’s construction sector increased their bank borrowing from N1.025 trillion in January 2022 to N1.157 trillion in October 2022.

This is in accordance with the Sectoral Analysis of Deposit Money Banks’ Credit by the Central Bank of Nigeria. The companies borrowed N132 billion between January 2022 and October 2022, according to CBN data.

This comes just a few days after a National Bureau of Statistics study showed that in the first three quarters of 2022, construction services contributed N12.9 trillion to the GDP.

The CBN Governor, Godwin Emefiele, had stated in January of this year that the banking industry would increase access to credit and financing for individuals and businesses in 2022.

The bank’s policy goal for 2022, according to him, is to “maintain enhanced access to finance and credit for individuals and companies, mobilize investment to boost domestic productivity, permit quicker growth of non-oil exports, and promote employment creating activities.”

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The current double-digit lending rate is unfavorable, stakeholders have maintained, as it has an immediate effect on production costs and the sector’s ability to compete.

Godfrey Chukwurah, the public relations officer for the Nigerian Institute of Builders’ Lagos Chapter, responded by saying that despite the nation’s economic crisis, more businesses were turning to banks for further loans in an effort to combat inactivity.

He declared, “Business requires taking risks, thus I think many business owners continue to borrow because they don’t want to be idle. The sector is not doing well only because people are borrowing. I can tell you that this industry is struggling.

28 million housing units are thought to be lacking in Nigeria. The need for housing has grown as a result of the nation’s expanding population, but finding affordable home remains a serious issue. To satisfy the growing demand, businesses are stepping up their development efforts, but the high cost of construction is translating into expensive rent and building costs.

According to the Federal Government, the country’s capital stock is still around 35%, making housing and infrastructure capital-intensive industries.

According to the Federal Government, Nigeria requires at least $1.5 trillion in the following ten years to make up for its infrastructure deficit and reach a respectable level of infrastructure stock.