There are indications that the financial support from the Central Bank of Nigeria to the power sector will help reduce the amount of Non-performing Loans in the banking system, especially for lenders that are highly exposed to the sector.
This declaration was made at the Renaissance Capital ninth Annual Pan-Africa 1:1 Investor Conference held in Lagos on 16-17 May. The global investment banking firm believes the Nigerian banking sector is slowly returning to stability, but asset quality issues and the declining yield environment remain a challenge, adding that the overall operating environment still favours the big banks.
Recall that the Federal Executive Council last year approved a N701 billion payment assurance guarantee for the power sector, to be provided by the Central Bank of Nigeria as part of measures to solve the liquidity problems in the power sector.
The N701 billion Payment Assurance Guarantee (PAG), is the latest intervention by the CBN in the Nigerian power sector. Other interventions by the CBN are the N300 billion Power and Aviation Intervention Facility (PAIF) and the N213 billion Nigeria Electricity Market Stabilisation Facility (NEMSF).
Source: Tribune
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