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.
Economic stimulus measures (e.g. loans, moratorium on debt repayments…)
- On 16 March, the Central Bank of Nigeria announced new measures:
- A 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 NGN50 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 NGN100 billion intervention fund in healthcare loans to pharmaceutical companies and healthcare practitioners intending to expand/build capacity
- Identification of 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.
- The CBN has adopted a unified exchange rate system for Inter-Bank and parallel market rates to ease pressure on FOREX earnings as oil prices continues to plummet.
- CBN adopts the official rate of NGN360 to a dollar for International Money Transfer Operators rate to banks.
- For on-lending facilities financial institutions have been directed to engage International development partners and negotiate concessions to ease the pains of the borrowers.
- Provision of credit assistance for the health industry to meet the potential increase in demand for health services and products "by facilitating borrowing conditions for pharmaceutical companies, hospitals and practitioners".
- The crude oil benchmark price was also reduced from USD 57 to USD 30.
- The Central Bank pledged to pump NGN 1.1 trillion (USD 3 billion) into critical sectors of the economy.
- Commencement of a three month repayment moratorium for all TraderMoni, MarketMoni and FarmerMoni loans
- Similar moratorium to be given to all Federal Government funded loans issued by the Bank of Industry, Bank of Agriculture and the Nigeria Export-Import Bank.
Read the full article via KPMG here.