CBN releases measures to battle economic impact of coronavirus

The Central Bank of Nigeria (CBN) announced six new policy measures to mitigate the spread of the dreaded coronavirus across the country.

Addressing journalists yesterday in Abuja, the governor, Godwin Emefiele, said the apex bank’s intervention facilities had been granted a further moratorium of one year in all principal repayments, with effect from March 2020.

According to him, any intervention loan currently under moratorium has been granted additional period of one year.

Mr Godwin Emefiele also announced the reduction of interest rates on all applicable CBN intervention facilities to five per cent from nine per cent per annum, for one year effective from this month.

The apex bank, according to him, is also establishing a N50 billion facility through the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) microfinance bank for households as well as Small and Medium-sized Enterprises (SMEs) that have been hit by the COVID-19.

However, economic pundits are pessimistic about the actualisation of the policies because of the country’s weak economic outlook.

An economist, Johnson Chukwu, said the measures would boost the confidence of the people, but argued that the apex bank might face some challenges in the implementation.

“What CBN is trying to do is to give people some level of confidence. It is a positive action plan to support the economy.

But the modalities in implementing it are the challenges,” he said.Chukwu cited the reduction in interest rate, which he said might be tricky to implement because “it is an agreement” between banks and their customers.

According to him, the apex bank must reach a risk sharing agreement with banks for them to willingly accept the cut in interest rate and extension of moratorium.