By Bassey Udo
After taking stock of the impact of the various interventions introduced in the wake of the COVID-19 pandemic in the last two years, the Centtal Bank of Nigeria says it would further implementation of these initiatives, to ensure they continued to achieve the desired results.
Speaking at a special press briefing in Abuja at the end of the Bankers’ Committee meeting on Thursday, the CBN governor, Godwin Emefiele, said it was clear the impact of the measures helped the country achieve the fastest recovery from recession ever recorded as well as changed the trajectory of inflation to an eight-month downward spiral.
In the wake of COVID-19 pandemic, which devastated the global economy, the monetary and fiscal authorities were compelled to adopt drastic measures to stabilize the economy.
To help resolve the difficulties, which resulted in a contraction of the country’s gross domestic product (GDP), and other challenges, the CBN introduced a number policy initiatives to increase spending to support the economy and prevent a spike in inflation and heightened pressure on the country’s exchange rate.
To restore stability to the economy, the CBN decided to provide assistance to individual households, small and medium enterprises (SMEs) and businesses devastated by the pandemic as well as by the lockdown measures.
Some of the measures includ a one-year extension of the moratorium on principal repayments for CBN intervention facilitie; a cut in the Monetary Policy Rate by 100 basis points from 12.5% to 11.5%, and the interest rate on CBN intervention loans from 9 to 5 percent.
Other measures included creation of N300 billion Targeted Credit Facility (TCF) for affected households and SMEs through the NIRSAL Microfinance Bank; establishment of a N100 billion intervention fund in loans to pharmaceutical companies and healthcare practitioners intending to expand and strengthen the capacity of healthcare institutions.
The CBN also set up a research fund, to support the development of vaccines in Nigeria; a N1trillion facility in loans to boost local manufacturing and production across critical sectors and introduction of policies and programmes to boost diaspora remittances.
Reviewing the impact of the various initiatives, Emefiele said to date the CBN, working with deposit money banks (DMBs) and participating financial institutions granted over N3 trillion in intervention loans that that facilitated economic recovery and employment generation.
Specifically, the CBN governor said the apex bank disbursed about N948 billion to 4,478,381 smallholder farmers who cultivated 5.2 million hectares of farmland across the country, under the Anchor Borrowers Programme, resulting in about 12.5 million direct and indirect jobs being created.
Under its Targeted Credit Facility meant to help households and businesses that suffered significant losses during the pandemic, Emefiele said the CBN disbursed N368.79 billion to 778,000 beneficiaries comprising 648,052 households, and about 130,000 SMEs.
He said another N1.452 trillion was disbursed to 337 large real sector projects in agriculture, manufacturing, services, and mining under its Real Sector Support Facility, while 122 major healthcare projects were funded to the tune of N115.36 billion under healthcare interventions to 31 pharmaceutical and 91 hospital projects.
This intervention, he noted, helped to support acquisition of 59 Magnetic Resonance Imaging (MRI) scanners, 42 Computer Tomography (CT) scanners, and 4 Oncology screening machines.
For the AGSMEIS programme set up to cater for SMEs in the agribusiness space, Emefiele said about N134.63 billion was released to 37,571 SME projects, of which 67 percent were directly in agriculture-related projects, 22.5 percent in services, and the balance in fashion, IT, and related sub-sectors.
Under the Nigeria Electricity Stabilization Facility, he said a total of N229 billion was disbursed to nine electricity distribition companies to help cover their financial obligations to upstream market participants.
“These interventions have helped to significantly improve liquidity in their ecosystem and increase electricity generation from 4,000 MW in 2020 to over 5,000 MW as of September 2021,” the CBN governor said.
In addition, he said the CBN also released N47.83 billion to 10 DisCos under the National Mass Metering Programme for the procurement of 858,026 electricity meters.
These disbursements, he said, significantly boosted the revenue collection for DisCos to over N69 billion as of December 2021.
These policies and measures, he said, also contributed to a significant improvement in diaspora inflow from an average of $6 million per week in December 2020 to an average of over $100 million per week by January 2022.
Despite the impact of the measures, the CBN governor said the interest rate on CBN intervention loans which was expected to revert to 9 percent effective March 1, 2022, would remain at 5 percent for another year till March 1, 2023, to continue to support economic growth and job creation.