Central Bank of Nigeria (CBN) on Monday announced a number of policy measures to ameliorate the effect of Covid-19 on the Nigerian Economy. In a circular directed to banks and the general public, the CBN slash interest rates on its various intervention programmes worth about N3 trillion to five per cent from current nine per cent per annum for next 1-year, effective March 1, 2020.

The CBN also announced a further moratorium of one year on all principal
repayments, effective March 1, 2020, on all CBN intervention facilities.

“This means that any intervention loan currently under moratorium is
hereby granted an additional period of one year. Accordingly,
participating financial institutions are hereby directed to provide new
amortization schedules for all beneficiaries.”

Source: https://www.nigerianbanker.com/covid-19-cbn-announces-policy-measures-to-cushion-effect-on-economy/

The CBN also establish a N50 billion targeted credit facility through the
NIRSAL Microfinance Bank for households and small- and medium-sized enterprises (SMEs) that have been particularly hard hit by Covid-19, including but not limited to hoteliers, airline service providers, healthcare merchants, and so on.

Added to the its intervention programmes is also the credit support for the
Healthcare Industry in order to meet potential increase in demand for
healthcare services and products. ”CBN bank opened for its intervention
facilities, loans to pharmaceutical companies intending to expand/open their
drug manufacturing plants in Nigeria, as well as to hospital and healthcare
practitioners who intend to expand/build the health facilities to first-class centers. This is in addition to growing the size of existing interventions to the
agricultural and manufacturing sectors in Nigeria,”.

In what it called Regulatory Forbearance, the Apex Bank also granted “all
Deposit Money Banks 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 & gas, agriculture, and
manufacturing. CBN would work closely with DMBs to ensure that the use of
this forbearance is targeted, transparent and temporary, whilst maintaining
individual DMB’s financial strength and overall financial stability of the
system.”

And in view of the success of the lending to deposit ratio (LDR) policy in growing credit to the economy and reducing interest rates, CBN announced that it would further support industry funding levels to maintain DMBs’ capacity to direct credit to individuals, households, and businesses.

The Apex Bank also announced that it “will also consider additional
incentives to encourage the extension of longer-tenured credit facilities, while
encouraging Deposit Money Banks to continue to build capital buffers in order to improve the resilience of the sector.

“The bank stands ready to provide liquidity backstops as and when
required in view of its role as Banker to the Federal Government and lender of
last resort. The CBN will continue to monitor development and will issue further updates as may be appropriate.

Recession loading....

My only happiness about this coronavirus is that it made Buhari to suspend borrowing $22.5 billion which will take us centuries and billions of barrels of oil to pay back