CBN introduces measures to check effect of coronavirus on the economy

The Central Bank of Nigeria has extended the moratorium on all its intervention funds. The new measure will cover interest rates reduction, creation of a N50 billion targeted credit facility and credit support for the healthcare industry.

The move according to the Governor of the Central Bank, Godwin Emefiele, is to cushion the adverse effects of coronavirus on businesses and Nigeria’s economy. The CBN governor said this during a media briefing in Abuja. He said the one year moratorium on all principal repayments took effect on the 1st of March 2020. The apex bank through its deposit money banks has also provided a total of N3tn to the Small and Medium Enterprises sector of the economy. The CBN governor said the bank had agreed to reduce the interest rate on all of its intervention funds from nine per cent to five per cent for a one-year period. Emefiele explained that the N50bn credit facility which will be created will go to boost Nigeria’s economy as Coronavirus outbreak hits world economies. The fund he said will be disbursed through the NIRSAL Microfinance Bank for households and SMEs that are affected by Covid-19. These outcomes have had serious adverse implications for key sectors, including but not limited to oil and gas, airlines, manufacturing, trade and consumer markets,” he said. He explained the credit would also be extended to hoteliers, airlines, service providers, and health care merchants, among others.

The CBN has also opened its intervention loans to pharmaceutical companies intending to expand their drug manufacturing plants in Nigeria, a move that is expected to meet the potential increase in demand for healthcare services and products in the face of coronavirus. What we are trying to say is that the burden of taking a loan and the strain of getting revenue to repay the loan has been ameliorated to the extent that you pay much less for your loan repayment for a longer period.” Emefiele said. He further announced a regulatory forbearance for deposit money banks (DMBs) going forward. He said the CBN will immediately grant all 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 particularly oil and gas, agriculture, and manufacturing.

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