COVID-19: CBN reduces interest rates, rolls out other interventions to cushion effect

The Central Bank of Nigeria (CBN) has announced reduction of interest rates in all its intervention facilities from nine per cent to five per cent per annum for one year to ameliorate the effect of coronavirus pandemic.

The CBN Governor, Mr Godwin Emefiele made this known while addressing newsmen in Abuja on Monday.

Emefiele said the reduction of the interest rates took effect from March 1.

He disclosed that the bank had also extended moratorium of all CBN intervention facilities on all principal repayment for one year effective from March 1.

The CBN governor explained that this means that any intervention loan currently under moratorium is hereby granted additional period of one year.

The governor, therefor, directed all financial institutions to provide new schedule for all facilities for their beneficiaries.

Similarly, Emefiele noted that the apex bank had also created a facility through the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) Micro Finance Banks to support households and Micro, Small and Medium Enterprises that had been hit by covid-19.

He disclosed that the sum of N50 billion would be given through NIRSAL to support business owners like hoteliers, airlines, service providers, and healthcare merchants among others.

The governor also announced credit support for healthcare industry to meet potential increase in demand for healthcare services and products.

“CBN hereby, opens its intervention facilities, loans to pharmaceutical companies intending to expand or establish their own drugs manufacturing companies in Nigeria.

“This will also be extended to hospitals and healthcare practitioners who intend to expand or build healthcare facilities to first class standard.

“This is in addition to growing the size of our existing intervention to the agriculture and manufacturing sectors in the country,’’ he said.

Emefiele noted that these interventions were necessary because of the effect of COVID-19 on global economy including Nigeria.

He said thousands of people had been affected while thousands were also killed by COVID-19, hence leaders of different countries had started to respond by taking actions to mitigate the pain caused by the outbreak.

The CBN governor added that initial assessment showed that the consequences of the health crisis on different countries would affect the economy.

He said that with this development, the global economy would go into recession, adding that these measures being taken by CBN were necessary.