Nigerian banks, nursing losses linked to a recent oil industry slump, are looking to alternative sectors to boost lackluster loan growth and broaden their risk exposure.

The performance of banks in the West African nation closely follows that of the country’s energy industry. About 30% of the value of banks’ lending is to the oil and gas sector, which accounts for about 10% of Nigeria’s GDP, and a sustained oil price slump from mid-2014 triggered extensive defaults among energy firms.

Oil production rose 7.6% year on year to 1.54 million barrels per day in 2017 and has increased further this year, according to OPEC data, and Brent crude prices are up by more than a third over the past 12 months, easing pressure on banks.

But lenders are now prioritizing recovering loans to oil and gas companies, rather than expanding lending to them. Banks are also now focusing a lot more on infrastructure, manufacturing and trade, which they believe will thrive in the latter part of 2018.

Source: S&P Global Market Intelligence