Lending to Nigerian businesses 'will not improve this year'

Sep 27, 2010

Bank lending to Nigerian businesses is unlikely to improve before the start of 2011, the Governor of the country's central bank has noted.

In an interview with Bloomberg, Sanusi Lamido Sanusi explained the availability of finance for private industries will remain unchanged until the opening three months of 2011, once restructuring of the financial institutions has been completed. "This quarter is likely to be a quarter of deals, mergers and acquisitions," he observed, noting the central bank is to purchase toxic debt worth $10 billion (€7.4 billion) as part of negotiations that will see some banks merged or taken over by the state.

Mr Sanusi was also confident banks will soon return to profitability, with "aggressive cost reduction" helping to narrow margins at the firms "very quickly". Earlier this month, Mr Sanusi told Reuters at a conference in London that the recovery of lending in Nigeria is not happening as quickly as the central bank would like.