The World Bank has said credit is bypassing the businesses that have the greatest potential to create jobs in Nigeria, urging the financial sector to redirect capital towards productive enterprises and infrastructure.
This was the central highlight of the keynote address delivered by Bertine Kamphuis, Lead private-sector development specialist with the World Bank, at the ongoing Chartered Institute of Bankers of Nigeria’s (CIBN) 19th annual conference in Abuja on Tuesday.
The conference came under the theme “Building a Resilient Economy in an Era of Disruptions: Imperatives for the Banking and Financial Services Industry” and is scheduled to hold between 8 and 9 September at the Transcorp Hilton in Abuja.
During her presentation, she said the country’s challenge was not necessarily a shortage of capital but how available capital was being allocated.
According to the specialist, domestic credit to the private sector stood at about 13 per cent of Nigeria’s Gross Domestic Product (GDP), among the lowest levels compared with similar economies.
“Credit is thinnest where job intensity is highest,” the World Bank representative said, noting that micro, small and medium enterprises (MSMEs) received only about one per cent of credit, while agriculture received about six per cent.
“This is where the jobs are. The core observation, to me and to the World Bank, is credit is bypassing the job creators,” the official said.
The World Bank said the issue was particularly important because between 3 million and 4 million young Nigerians enter the labour force every year, making it difficult for the government alone to meet the demand…
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