COVID19: CBN Plans Over N3.5trn Stimulus Package

• COVID19: CBN Plans Over N3.5trn Stimulus Package

The Central Bank of Nigeria (CBN) on Saturday announced series of stimulus packages to reduce the impacts of the coronavirus pandemic on the Nigerian economy.

In the Bankers’ Committee meeting held on Saturday, the committee increased the total intervention fund from the N1.1 trillion previously announced by the central bank to over N3.5 trillion.

Godwin Emefiele, the Governor, CBN, said the COVID-19 has disrupted global supply chains of drugs as China and India, the two dominant drug supply channels, are planning to ban the export of drugs and medical supplies in order to address local needs. Therefore, “we have no choice but to produce these items locally,” he said.

The governor, therefore, announced that “additional N100 billion intervention in healthcare loans to pharmaceutical companies, healthcare practitioners intending to expand/build capacity; N1 trillion in loans to boost local manufacturing and production across critical sectors.”

The committee listed ten pharmaceutical companies to be granted facilities in both Naira and foreign exchange to procure raw materials and equipment to boost local drug production. The ten companies are Emzor, Fidson, GSK, May & Baker, Unique Pharma, Swiss Pharma, Nimeth, Sagar, Orange Drugs, Dana Pharma Plc.

Emefiele, however, announced additional measures aimed at stimulating the economy, these included “additional moratorium of one year on CBN intervention facilities; interest rate reduction on intervention facilities from 9 per cent to five per cent; creation of N50 billion targeted credit facility for affected households and SMEs; granting regulatory forbearance to banks to restructure terms of facilities in affected sectors; strengthening the Loan Deposit Ratio (LDR) policy which is encouraging significant extra lending from banks.”

To better manage foreign exchange supply, the committee approved the sales of foreign currencies by both local and international oil companies directly to the Central Bank of Nigeria instead of the Nigerian National Petroleum Corporation (NNPC).

The governor said “Improving foreign exchange supply to the CBN by directing all oil companies(international and domestic) and all related companies(oil service) to sell forex to CBN and no longer NNPC; activation of the N1.5 trillion infraco project for building critical infrastructure; additional N100billion intervention in healthcare loans to pharmaceutical companies, healthcare practitioners intending to expand/build capacity; N1trillion in loans to boost local manufacturing and production across critical sectors.

“The combination of these measures amounts to over N3.5trillion in stimulus to the Nigerian economy to ameliorate the pains arising from the Covid 19 health and economic crisis. Given that this crisis is first and foremost a public health crisis, we are paying particular attention to our health industry. The global supply chains have been disrupted, including dominant drug supply channels from China and India.”