Over the course of the past few weeks, the news of the corona virus pandemic has taken over all news and radio stations and has led various countries and their governments on a scamper to contain the spreads and the effects of the virus.
The virus has led to large scale disruptions in the global economy resulting in the reduction in oil prices which is the principal way Nigeria raises funds, lock down of commercial and financial hubs, travel restrictions and turmoil in the financial markets.
The Central Bank of Nigeria which is known as the bankers’ bank and represents the government’s wishes in all matters pertaining the economy and fiscal policy has announced measures to reduce the negative impacts of the virus on the economy.
Image Source: thenationonlineng.net
The steps or measures taken by the Central Bank of Nigeria are aimed at trying to give Nigerians a certain level of confidence in the economy. Some of the policies and measures put in place by the federal government include:
- Reduction in the interest rates
- Creation of a 50 billion naira credit facility
- Extension of Moratorium
- Reduction in the interest rates: The Central bank of Nigeria in its bid to cushion the effect of the pandemic has lowered the interest rates on all applicable intervention facilities. The rates which were formerly pegged at 9 percent have been reduced to five percent per annum for the next one year and was put into effect on the first day of March 2020. This is meant to relieve the burden of repayment and also encourage businesses to take up loans for investment purposes and stimulate the economy.
- Creation of a 50 billion naira credit facility: The Central Bank through the Nigerian Incentive Risk Sharing system for Agricultural Lending (NIRSAL) which was launched in 2011, has established a facility to disburse a total of about 50 billion naira to small and medium sized enterprises especially those that have been hit hard by the pandemic including agricultural enterprises
- Extension of Moratorium: All intervention facilities have been granted a moratorium which is a legal authorization to debtors to delay or postpone payment of all debts for a specified period of time. The moratorium was setup to cover a year and starting from the first day of March 2020. Consequently all financial institutions have been directed to provide new repayment schedules.
REFERENCES
https://m.guardian.ng/news/cbn-releases-measures-to-battle-economic-impact-of-coronavirus/
Feature Image Source: https://www.boi.ng/boi-secures-cbn-license-repositions-for-service/
Written by Alahira Jeffrey