The Equipment Leasing Association of Nigeria (ELAN) has reported that outstanding leases in the leasing business in Nigeria grew by 23.2% in 2024, with the value of leases rising to N5.17 trillion, up from N4.19 trillion in the preceding year.
The association in a statement issued on Sunday also disclosed that new leases also reached a peak of N973.3 billion during the year under review demonstrating its resilience in the face of the macroeconomic and global challenges.
The data published on the performance of the industry by the ELAN indicated that over the past 10 years, the leasing sector had contributed an estimated N24.6 trillion to the nation’s economy.
A breakdown of sectoral distribution of leases in 2024 showed that the Oil and Gas sector accounted for the largest share with N1.38 trillion or 26% of total leases followed by Transportation and Logistics sector with N1.18 trillion or 21%, while manufacturing recorded N734.3 billion, representing 13% contribution to performance of the industry.
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The Telecoms sector accounted for N462.2 billion or 9%; Agriculture N378.6 billion, representing 8.5%; and Government N345.3 billion or 7.5%; Other sectors, including Education and Healthcare, accounted for N686 billion, representing 15% of the industry’s output during the year under review.
According to the association, the industry’s growth was primarily due to the rising cost of assets following the government’s removal of petrol subsidies and the floating of the naira, both of which necessitated additional funds to do leasing business.
It attributed other factors to new entrants into the leasing market, increased awareness about leasing, and innovative strategies of industry operators.
Finance lease maintained dominance with 52% of total transactions, though operating lease gained traction among corporate clients who prefer outsourcing logistics and transport services. Many lessors have shifted from finance leases to operating leases to manage risks and meet outsourcing demands.
A further analysis of the industry’s performance data reflected that Vehicle leasing, comprising staff buses, haulage trucks, and commercial vehicles, remained the most leased asset in 2024, accounting for 53% of the total asset base.
The industry umbrella association expects that the leasing industry will continue to grow in the years ahead, based on improving government’s investments in infrastructure, particularly in transportation, power, healthcare, construction, and agriculture sectors.
In addition, industry experts anticipate that the operations by the Equipment Leasing Registration Authority (ELRA) will spur the industry’s growth by its implementation the Equipment Leasing Act 2015.
