Nigeria’s non-performing loans have double since 2015, says IMF

The International Monetary Fund (IMF) says non-performing loans across Nigerian banks have increased by more than double since 2015.

This was revealed by the IMF staff team, which visited Nigeria from July 20 to July 31, to discuss recent economic and financial developments, update macroeconomic projections, and review reform implementation.

The team, led by Amine Mati, senior resident representative and mission chief for Nigeria at the IMF, said MPLs have grown from six percent in 2015 to 15 percent in 2017.

“Preliminary data for the first half of the year indicate significant revenue shortfalls, with the interest-payments to revenue ratio remaining high (40 percent at end-June) and projected to increase further under current policies,” the statement by the team read.

“High domestic bond yields and tight liquidity continue to crowd out private sector credit. Given Nigeria’s low growth environment and the banking system’s exposure to the oil and gas sector, non-performing loans increased from 6 percent in 2015 to 15 percent in March 2017 (8 percent after excluding the four undercapitalized banks).”

The team also said “helped by favorable base effects, headline inflation decreased to 16.1 percent in June 2017, but remains high despite tight liquidity conditions”.