COVID-19: Mixed reactions trail CBN’s policy measures

Mixed reactions have trailed policy measures announced by the Central Bank of Nigeria (CBN) to tackle the effect of COVID-19 on the nation’s economy.

It was reported that the apex bank Governor, Mr Godwin Emefiele, on Monday, announced that CBN intervention facilities had been granted a further one-year moratorium on all principal repayments, effective March 1.

Emefiele also said that the bank had decided to reduce the interest rate on all of its intervention funds from nine per cent to five per cent per annum, for a one-year period effective March 1.

Among other policy measures, he announced that the CBN had established a N50 billion credit facility through NISRAL Microfinance bank, for households and Small and Medium-sized enterprises hard-hit by COVID-19.

Reacting to the measures, Prof. Uche Uwaleke of Nasarawa State University, Keffi, commended the CBN for the initiative, noting that the N50 billion stimulus package was timely.

Uwaleke told NAN in Lagos that the N50 billion stimulus package, if properly applied, would have positive effects on financial markets.

He said that the reduction from nine per cent to five per cent alongside the CBN’s moratorium intervention would provide relief for firms, especially into agriculture as well as Small and Medium Enterprises with dwindling revenues occasioned by the COVID-19 pandemic.

Alhaji Rasheed Yussuf, former President, Association of Stockbroking Houses of Nigeria (ASHON), commended the apex bank for the measures aimed at stabilising economic activities.

Yussuf said it was a step in the right direction to reduce the impact of COVID-19 on the economy and businesses.

“It’s a step in the right direction; at least they have come out with positive measures to address some economic issues.

“For now, the stock markets are stabilising, but let’s see how it goes, because things are happening per second in the world,’’he said.

Yussuf said that the country should expect more measures as things unfold in the global economy.

Also speaking, Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said the CBN’s move to cut interest rate for N3 trillion intervention fund from nine per cent to five per cent was a welcome development.

Omordion said the interest rate cut would keep and propel economic activities in the critical sectors of the economy.

“This will help the sectors to mitigate the multiplier effect of coronavirus that is spreading like wildlife,’’ he said.

Omordion observed that the central banks and governments of developed economies were already taking similar measures to avoid a collapse of their respective economies.

He said that SMEs would not close shop, with proper implementation of the measures.

However, Mazi Okechukwu Unegbu, former President, Chartered Institute of Bankers of Nigeria (CIBN), said that the CBN should have done more to address the economic realities.

“CBN should have looked at the generality of the economy and made economic policy announcement that will address the collapsed interest rate, the lending rate and capital market depreciation.

“Moratorium of one year for borrowers are operational issues that banks should deal with, it’s not a policy-making issue.

“However, I am not quarrelling with it; since they have done it, let it work for us.

“But I must say that we should be addressing the economy, going by the statistics released by the National Bureau of Statistics.

“Let’s watch and see what the impact of these measures will add to the economy in the next three months,” he said.