Oil and Gas Firms' Indebtedness to Nigerian Banks Stood at N2.45 Trillion at December 2013

Oil and Gas Firms' Indebtedness to Nigerian Banks Stood at N2.45 Trillion at December 2013

The Central Bank of Nigeria (CBN)’s recently released Financial Stability Report shows that the indebtedness of oil and gas firm to Nigeria banks stood at N2.644 trillion at the end-December 2013.
The report revealed that total bank loans and advances to the various sectors of the economy grew by 13.9 per cent to N10.043 trillion at the end of December 2013. The oil and gas sector recorded the highest growth rate, with a share of 24.4 per cent, followed by manufacturing 12.9 per cent and the general sector 11.6 per cent.
The CBN, however, warned: “The continued dominance of short-term deposits constrained the ability of banks to lend long term loans and especially to the real sector, which typically has a preference for longer loan maturities. Thus, the observed mismatch portends refinancing and re-pricing risks for the system.”
With oil prices in a downward trend, the report warned that the continuing decline in oil revenues as a result could elevate market risks in 2014. The report stated: “Notwithstanding the stable rates, the continued decline of foreign reserves and decrease in oil receipts due to challenges in the oil sector, coupled with possible foreign portfolio investment reversals following the tapering of the US quantitative easing programme, could elevate market risk.”

EIA

EIA


Given that Nigeria and seven other African oil producing countries could experience boom in the coming years, with Mozambique and Tanzania set to emerge as new frontiers, if they can attract enough investment, a report by PriceWaterhouseCoopers stated.
Still, the continent faces fierce competition for vital investment from other parts of the world, the PWC report cautioned. “A huge obstacle to growth in Tanzania and Mozambique is the cost of the infrastructure required, which neither country can afford without help from foreign investors,”.
Oil and Gas Press

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