After the election period, there were some signs that economic policy would become more growth-supportive in Nigeria. After the surprise easing of monetary policy (Wero, March 27th), the Central Bank came up with new measures to unleash bank credit. From October, commercial banks will have to cope with a minimum 60% loan-to-deposit ratio after the Tier-1 lenders ratio decreased to 54% in 19Q1 from 61% in 18Q1 and 76% in 17Q1. The measure is also accompanied by incentives (higher weight in ratio calculation) for loans to SMEs. This should help Nigeria make the most of progress made in the rules that organize access to credit in the last few years (as shown by the 12th position in that indicator in the World Bank Doing Business ranking). Low access to credit is among the bottlenecks that prevent Nigerian corporates to benefit from decent payment terms (75% of payments are made in cash, according to our estimates). Overall, we expect GDP growth to accelerate a bit to +2.4% in 2019, from +1.9% in 2018.
