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CBN rolls out measures to check effect of coronavirus on economy

Anthony Iwuoma

Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has announced the apex bank’s decision to extend the moratorium on all its intervention funds in order to cushion the adverse effects of coronavirus on businesses and Nigeria’s economy.

He disclosed that the one year moratorium on all major repayments took effect on March 1, 2020.

The new measure, which covers slash of interest rates, setting up of a targeted N50 billion credit facility and credit support for the healthcare industry, was announced at a media briefing in Abuja by the CBN governor.

The CBN had through its deposit money banks also provided a total of N3 trillion to the Small and Medium Enterprises sector of the economy but Emefiele said the bank had agreed to slash the interest rate on all of its intervention funds from nine per cent to five per cent for a year.

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According to the CBN governor, the proposed N50 billion credit facility, which will be disbursed through the NIRSAL Microfinance Bank for households and SMEs that are affected by Covid-19, would expectedly boost the country’s economy, as the pandemic disease affects economies all over the world.

“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, adding that the gesture would also be extended to hoteliers, airlines, service providers, and health care merchants, among others.

The CBN governor said: “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 also announced that a regulatory forbearance for deposit money banks (DMBs), saying the CBN would promptly 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.

The apex bank has also given intervention loans to pharmaceutical companies, which have plans to expand their drug manufacturing plants in Nigeria, and thereby help in meeting the increasing demand for healthcare services and products in the face of coronavirus.