CBN Releases Measures To Battle Economic Impact Of Coronavirus

President Buhari discusses with Central Bank of Nigeria Governor Godwin Emefiele during the 4th Presidential Task Force meeting of ECOWAS on common currency for member states (file photo: State House)

The Central Bank of Nigeria (CBN) has announced six new policy measures to mitigate the spread of the dreaded coronavirus across the country.

Addressing journalists on Monday in Abuja, the governor, Godwin Emefiele, said the apex bank’s intervention facilities had been granted a further moratorium of one year in all principal repayments, with effect from March 1, 2020.

According to him, any intervention loan currently under moratorium has been granted an additional period of one year.

Emefiele also announced the reduction of interest rates on all applicable CBN intervention facilities to five percent from nine percent per annum, for one year effective from this month.

The apex bank, according to him, is also establishing a N50 billion facility through the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) microfinance bank for households as well as Small and Medium-sized Enterprises (SMEs) that have been hit by the COVID-19.

The fund, according to the governor, will be disbursed through the NIRSAL Microfinance Bank for households and SMEs that had been particularly hard hit by Covid-19.

The credit would also be extended to hoteliers, airlines, service providers, and health care merchants, among others.

The CBN governor said the one-year moratorium was granted to reduce the burden of loan repayment by businesses.

This means that any intervention loan currently under moratorium has been granted an additional one-year period.

Accordingly, the governor said participating financial institutions have been directed to provide new amortisation schedules for all beneficiaries.

To meet potential increase in demand for healthcare services and products, Emefiele said the CBN had opened for its intervention facilities loans to pharmaceutical companies intending to expand their drug manufacturing plants in Nigeria.

He said the facility would also be extended to hospitals and healthcare practitioners intending to expand or build first-class health centres.

He also announced a regulatory forbearance measure for the banking sector, adding that this would grant all the DMBs leave to consider temporary and time-limited restructuring of the tenor and loan terms for businesses and households most affected by the outbreak of Covid-19.

The major sectors that would enjoy this forbearance are oil and gas, agriculture, and manufacturing.

In view of the success so far recorded in the Loan to Deposit Ratio policy in growing credit to the economy and reducing interest rates, the governor said the apex bank would further support industry funding levels to maintain the DMBs capacity to direct credit to individuals, households and businesses.

Emefiele said through the LDR, about N2tn credit had been unlocked by the CBN to the economy.

“We will also consider additional incentives to encourage extension of longer tenor-credit facilities. The DMBs are encouraged to continue to build capital buffers in order to improve resilience of the sector,” he added

He said, “The Central Bank of Nigeria in furtherance of its financial stability mandate is committed to providing support for affected households, businesses, institutions, and other stakeholders in order to cushion the adverse economic impact of this (coronavirus) pandemic.”

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Olugbenga Ige is an alumnus of the prestigious Adekunle Ajasin University, Ondo State and The Polytechnic, Ibadan. Gbenga is an experienced reporter at Concise News, a new media enthusiast, and fine-grained media influencer.

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