THE ANNUAL growth in banks outstanding credit to the public and private sectors in the first quarter of 2020 decreased significantly compared to what was recorded in the corresponding period of 2019.
The nominal annual growth rate of banks outstanding credit decreased from 23.9 per cent in the first quarter of 2019 to 16.5 per cent in the first quarter of 2020. This was also lower than the growth of 22.4 per cent recorded in the fourth quarter of 2019.
The central bank’s First Quarter Bulletin, which made this known, said at the end of the first quarter of 2020, total outstanding credit stood at GH¢51,924.60 million compared with a stock of GH¢44,566.50 million and GH¢52,276.80 million for the first and fourth quarters of 2019 respectively.
The decrease in the nominal growth in credit reflected in decreases in the nominal growth in credit to both the public and private sectors. In real terms, credit from banks decreased from 16.3 per cent at end of the first quarter of 2019 to 4.6 per cent in the same period of 2020.
This was also lower than the 13.4 per cent growth realized in the fourth quarter of 2019. The share of total outstanding credit to the private sector however increased to 87.3 per cent at the end of the review period, from 86.9 per cent recorded in the first quarter of 2019.
Outstanding Credit To Private Sector
The growth of outstanding credit to the private sector decreased in nominal and real terms in the first quarter of 2020. In nominal terms, it decreased to 17.1 per cent in the first quarter of 2020 from 22.1 per cent recorded in the first quarter of 2019.
This was also lower than the 18.3 per cent registered at the end of the fourth quarter of 2019. Total outstanding credit to the private sector at the end of the first quarter of 2020 stood at GH¢45,339.50 million, compared with GH¢38,722.1 million in the first and GH¢44,485.30 million for the fourth quarters of 2019.
In real terms, the annual growth rate of outstanding credit to the private sector decreased to 8.6 per cent at the end of the first quarter of 2020, from 14.6 per cent in 2019.
While Manufacturing, Commerce & Finance, Mining & Quarrying, and Elec., Gas & Water experienced decreases in credit flows, Agriculture, Forestry & Fisheries, Transport, Storage & Communication, Services and Construction saw significant increases in credit flow in March 2020 compared to the corresponding period in 2019.
The major beneficiary sectors of annual flow of private sector credit in the first quarter of 2020 were Services (23.3%), Commerce and Finance (17.9%), Manufacturing (10.7%), Miscellaneous (11.5%), and Construction (10.8%). These top five sectors accounted for about 74.2 per cent of the overall credit flow for the first quarter of 2020.
BY Samuel Boadi