The Central Bank of Nigeria, CBN, has cut interest of its intervention programmes from 9 per cent to 5 per cent, for one year, effective March 1, as part of the six measures it announced to mitigate the impact of COVID-19 in Nigeria.
Recall that African countries have announced several measures at combating the impact of coronavirus on the nations’ economies, including border closures, flight cancellation, and imposition of strict entry regulations.
Stating this, the CBN governor, Godwin Emefiele, while addressing journalists in Abuja, the nation’s capital, said that the policies will provide support for Nigerians to cushion impact of coronavirus on businesses, economy, and the financial markets.
Other measure, as enumerated by the CBN governor include: extension of moratorium on loans, where Nigerian banks will be allowed to restructure existing loans, (e.g. from 6 months to 12 months), with lower interest rates as well; creation of N50 billion fund to support SMEs of airlines, hotels, healthcare merchants, etc; regulatory forbearance, where banks would be granted leave or forbearance on loans (both principal and interest), by the CBN, to agriculture, oil and gas, and manufacturing clients, to be done temporarily and transparently, while maintaining stability of the financial system; and strengthening of loan-to-deposit rate policy, in order to further support industry funding levels to maintain bank’s capacity to direct credit to individuals, households, and businesses.
The loans which enjoys cut in interest rate are about N3 trillion, which the apex bank, through banks had provided to the Small and Medium Enterprises sector, given through the Commercial Credit Guarantee Scheme, and the Anchor Borrowers Programme, and other programmes.
Reacting, a Fixed Income and Currency specialist, Omotola Abimbola, applauded the CBN measures, describing them as “good for the business community and the economy at large.”
He said, “CBN unveiling stimulus measures during the BoP (balance of payments) crisis. Good for the business community and the economy at large, but the governor still failed to comprehensively address the elephant in the room.”, he tweeted.
Recall that coronavirus now has a foothold in 31 countries on the continent as at Monday, March 20