Technology and telecom companies in Nigeria owed banks N1.69 trillion as of September 2024. This comes at a time when these companies are asking to charge customers more for data and phone calls.
According to the Central Bank of Nigeria’s report, this debt is actually N68.04 billion (3.9%) less than what these companies owed in September 2023, which was N1.77 trillion. This drop happened because the Central Bank kept raising interest rates, making it harder and more expensive for companies to borrow money. However, looking at just month-to-month, the debt went up slightly by N31.61 billion (1.9%) from August 2024.
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Throughout 2024, the borrowing patterns changed a lot. January started high at N2.47 trillion, almost double the amount from January 2023. By March, borrowing slowed down to N1.67 trillion. From June onwards, the numbers started dropping compared to 2023. By September, the decrease of N68.04 billion showed companies were being careful about borrowing due to uncertain economic conditions and high interest rates.
The main reason for less borrowing was the Central Bank’s strict money policies. The new Central Bank Governor, Yemi Cardoso, who started in September 2023, raised interest rates six times in 2024. The biggest increase came in February, jumping from 18.75% to 22.75%. After that, rates kept climbing: to 24.75% in March, 26.25% in May, 26.75% in July, 27.25% in September, and finally 27.50% in November. These increases, totalling 875 basis points, were meant to fight inflation and stabilize Nigeria’s economy. This made it harder for companies to borrow money, especially tech companies that need a lot of capital.