Business

CBN introduces measures to address coronavirus impact on Nigerian economy

The Central Bank of Nigeria (CBN) has introduced its first policies to address the negative impact coronavirus (COVID-19) on Nigerian businesses and economy.

The CBN Governor, Godwin Emefiele announced in a press briefing on Monday announced that the reduction of interests rate on its intervention loans from nine percent to five percent.

Also, Emefiele also announced a N50 billion additional fund for the NIRSAL Micro Finance Bank for on-lending to Small and Micro Enterprises.

According to the CBN Governor, “The Coronavirus pandemic is having consequences for both the global and the Nigerian economies. It has already led to unprecedented disruptions in global supply chains, sharp reduction in crude oil prices, turmoil in the global stock and financial markets, widespread cancellations in sporting, entertainment and business events, lockdown of large source of movement of persons, in many countries and intercontinental travel restrictions across critical air routes across the world.

“These outcomes have had adverse effects for key sector including oil and gas, airlines, manufacturing, trade and consumer markets.

“In furtherance of its financial systems stability mandate, the CBN is committed to providing support for affected households, businesses, regulated financial institutions and other stakeholders in order to cushion the adverse economic consequences of this pandemic on our people.

“The CBN, operating through our Deposit Money Banks has close to N3 trillion in various forms of intervention facilities either through the Anchor Borrowers Programme, the Commercial Agriculture Credit Scheme, our Micro and Medium Enterprises programme or through our ASMIES programme .

“Since we expect that as a result of this pandemic, revenues that would accrue to businesses to run their businesses as well as paying their bank loans have become so short naturally, we expect that there would be difficulties by businesses to service their loans.

“So we make the following proposition besides others that we will be making from time to time as we proceed in this journey. All CBN intervention facilities are hereby granted a further moratorium of one year on principal repayments, effective March 1, 2020.

“This means that any intervention loan currently under moratorium are hereby granted another moratorium on one year. Accordingly, participating financial institutions are hereby directed to provide new amortization schedules for all facilities for their beneficiaries.

“Interest rates on all applicable CBN intervention facilities are hereby reduced from 9 percent to 5 percent per annum for one year, effective March 1, 2020.”

In addition, the apex bank introduced a special funding for small businesses.

Emefiele said: “The CBN hereby establishes a facility through NIRSAL Micro Finance Bank to the sum of N50 billion for households and Micro, Small and Medium Enterprises that have been particularly hit by COVID-19, including but not limited to hoteliers, airlines providers, healthcare merchants and others.”

Muhammad A. Aliyu

Muhammad Ameer Aliyu, is a prolific journalist who joined Okay Nigeria in 2015 with the aim staying committed to bringing more positive growth to the digital news platform. He is the Senior editor at Okay Nigeria.
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