The Equipment Leasing Association of Nigerian (ELAN) has announced that the Nigerian leasing industry recorded N5.16 trillion transactions in 2024, which represented a growth of 23.2 per cent against N4.19 trillion in 2023.
The assassination said that while new leases peaked at N973.3 billion, adding that leasing contribution to the Nigerian economy over the last decade is estimated at N24.6 trillion.
The leasing industry’s performance in 2024 was driven largely by the oil and gas sector, transport and logistics and the manufacturing sectors.
The ELAN said: “The oil and gas sector represented 26 per cent of the outstanding leases with N1.3 trillion, followed by the transportation and logistics sector with N1.1 trillion, 21 per cent.
“Manufacturing had N734 billion, with 13 per cent; telecoms – N462 billion, representing 9.0 per cent.
“Agriculture N378 billion with 8.5 per cent; government N345 billion (7.5 per cent) while others (including healthcare and education) generated N686 billion, accounting for 15 per cent of the volume.”
The association said that the growth in lease volume was driven by the astronomical rise in the cost of assets, occasioned by two of the cardinal reforms of government – the removal of petrol subsidies and the floating of the Naira, as more money was required to finance leases.
Other factors, according to ELAN, include more new entrants and investment into the industry; increasing innovations and strong resilience by the industry’s players; increasing level of awareness of the benefits of leasing, which continues to be more compelling given the increasing cost of assets.
It said that finance lease maintained its lead position with 52 per cent of the total transactions, with operating lease increasing its market share in recent times, due to its continued preference and patronage by corporate bodies.
It said: “Operating lease allows these companies to focus on their core activities, while outsourcing other operational functions such as transportation and other logistics services. A
“Also, many lessors have been shifting to operating leases in recent years as a risk-mitigating product and to create a niche market for themselves.
“Essentially, some major lessors have stopped finance lease completely, focusing on operating lease to balance their risk appetite and meet the outsourcing needs of clients.”
It said that in a bid to create a further niche, some of these lessors have set up workshops of their own, providing services to outside customers as well.
It also pointed out that vehicle leasing has remained dominant as the largest leased asset segment, constituting about 53 per cent of the leased assets.
“Vehicle leasing, including staff shuttles, commercial buses, trucks for haulage, and operational vehicles, continued to be a major attraction in recent times.
“Indeed, the industry is expected to maintain its resilience, given the growth potential of the industry – the wide financing gap in various sectors of the economy and increasing demand for creative financing options to meet asset needs by the investing public, the economic agenda of the governments across all levels especially, increasing spending in critical infrastructure in key sectors such as transportation – the CNG initiatives for instance, power, health care, construction, agriculture, manufacturing, and technology present a rich menu of leasing opportunities, notwithstanding the continued challenges posed by the macroeconomic environment.
“Also, it is expected that with the kickoff of operations of the Equipment Leasing Registration Authority (ELRA), the industry is set to witness enhanced growth, as the authority is expected to provide the integral booster for the faster development of the leasing industry as it gives effects to the full implementation of the Equipment Leasing Act 2015,” ELAN said.
