The Equipment Leasing Association of Nigeria (ELAN) has unveiled a stellar performance for the Nigerian leasing industry in 2024, reporting a remarkable 23.2% growth in transaction volume, reaching N5.16 trillion compared to N4.19 trillion in 2023.
This surge underscores the sector’s growing importance as a cornerstone of Nigeria’s economic framework, with an estimated contribution of N24.6 trillion to the economy over the past decade.
The leasing industry’s robust performance in 2024 was propelled by significant activity in the oil and gas, transport and logistics, and manufacturing sectors. According to ELAN, the oil and gas sector led with a commanding 26% share of outstanding leases, totaling N1.3 trillion.
The transportation and logistics sector followed closely with N1.1 trillion (21%), while manufacturing contributed N734 billion (13%). Other notable sectors included telecommunications (N462 billion, 9%), agriculture (N378 billion, 8.5%), and government (N345 billion, 7.5%). The remaining 15% (N686 billion) came from diverse sectors such as healthcare and education.
ELAN attributed the growth to several macroeconomic and industry-specific factors. The removal of petrol subsidies and the floating of the Naira, two pivotal government reforms, triggered an astronomical rise in asset costs, necessitating larger lease financing.
Additionally, the industry saw an influx of new entrants, increased investment, and a wave of innovations that bolstered its resilience. Growing awareness of leasing benefits, particularly in an environment of escalating asset prices, further fueled demand.
Finance leases continued to dominate, accounting for 52% of total transactions, reflecting their entrenched popularity among businesses seeking long-term asset financing. However, operating leases have gained significant traction in recent years, driven by corporate preference for flexible, short-term arrangements. This shift highlights the industry’s adaptability to evolving market needs.
Vehicle leasing remained the largest asset segment, constituting 53% of leased assets. From staff shuttles and commercial buses to trucks for haulage and operational vehicles, this segment continues to attract significant interest. ELAN noted that the demand for vehicle leasing is driven by Nigeria’s expansive transportation needs, particularly in logistics and corporate mobility.
The leasing industry’s growth comes against the backdrop of Nigeria’s broader economic challenges, including inflationary pressures and currency volatility. The floating of the Naira and the removal of fuel subsidies, while driving up asset costs, have also underscored the critical role of leasing as an accessible financing option for businesses and government entities.
With Nigeria’s economic agenda prioritizing infrastructure development in sectors like transportation, ELAN projects sustained growth for the industry, fueled by untapped potential and rising demand for innovative financing models.
The association said, “The leasing industry’s performance in 2024 is a testament to its resilience and adaptability. Despite economic headwinds, we have seen remarkable growth, driven by strategic reforms, innovation, and a deepening understanding of leasing’s value.”
As Nigeria continues to prioritize infrastructure and economic diversification, the leasing sector is well-positioned to bridge critical financing gaps.
WHAT YOU SHOULD KNOW
ELAN remains confident that ongoing advocacy for a supportive regulatory framework, coupled with industry innovations, will sustain momentum. The association is also intensifying efforts to raise awareness about leasing benefits, targeting small and medium enterprises (SMEs) to expand its reach.
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