Oil firms operating in the downstream, natural gas and crude oil refining subsectors owe banks N3.93 trillion as at December 2020.
This figure went up from N3.42 trillion a year before, while those in the upstream and services subsector owe N1.25 trillion as of December 2020, up from N1.16 trillion in December 2019.
This figure, according to the sectorial analysis of banks’ credit by the Central Bank of Nigeria, represents the Non-Performing Loans (NPL) position of the N20.37 trillion loans advanced to the private sector by Nigerian banks as at December 2020.
It will be recalled that the slump in oil prices in 2020, as a result of the coronavirus pandemic, hit many oil and gas companies hard and forcing them to slash their capital budgets and suspend some projects.
According to the report, oil and gas firms which received the biggest share of the credit from the banks increased their debt by N600 billion to N5.18 trillion in December 2020 from N4.58 trillion in December 2019.
Reacting to the development, the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele said with the impact of the coronavirus on particular sectors of the economy, the increase in the amount of non-performing loans was not entirely unexpected.