CBN provides palliative measures to assist MSMEs cushion the effect of COVID-19. It reduces the CBN loan rate from 9% to 5%
The Central Bank of Nigeria has set out a number of measures to tackle the impact of the coronavirus, including establishing a fund to support the country’s economy (of 50 billion naira; i.e. EUR 121 million), targeted at households and micro and small enterprises. The interest rate has also been cut, a moratorium has been announced on principal repayments for CBN intervention facilities and tax measures are being taken.
The Monetary Policy
- 1-year extension of a moratorium on principal repayments for CBN intervention facilities;
- The reduction of the interest rate on intervention loans from 9 percent to 5 percent;
- Strengthening of the Loan to Deposit ratio policy (i.e. stepped up enforcement of directive to extend more credit to the private sector);
- Creation of N50 billion target credit facility for affected households and small and medium enterprises;
- Granting regulatory forbearance to banks to restructure terms of facilities in affected sectors;
- Improving FX supply to the CBN by directing oil companies and oil servicing companies to sell FX to the CBN rather than the Nigerian National Petroleum Corporation;
- Additional N100 billion intervention fund in healthcare loans to pharmaceutical companies and healthcare practitioners intending to expand/ build capacity;
- Identification of a few key local pharmaceutical companies that will be granted funding facilities to support the procurement of raw materials and equipment required to boost local drug production;
- N1 trillion in loans to boost local manufacturing and production across critical sectors.