Timeline of every action announced since the outbreak hit Nigeria
The number of people living with the Coronavirus Disease (COVID-19) and deaths from it have been on the increase daily.
The Federal Government and its relevant agencies, especially the Central Bank of Nigeria, have responded with policies to cushion the economy, restore investors’ confidence, and support Small and Medium Enterprises (SMEs) and households.
A look at some of the initiatives:
MARCH 16, 2020
On Monday, March 16, 2020, the Central Bank of Nigeria issued a circular to all Deposit Banks and the general public to announce its policy measures in response to COVID-19 outbreak and spillovers. Some of the measures are:
• Extension of Moratorium: The CBN Governor stated that all apex bank’s intervention facilities were granted a further moratorium of one year on all principal repayments, effective March 1, 2020. This means that any intervention loan currently under moratorium was granted an additional period of one year.
• Interest Rate reduction: Interest rates on all applicable CBN intervention facilities were thereby reduced from 9 to 5% per annum for 1 year, effective March 1, 2020
• Creation of N50 billion targeted Credit facility: It established the facility through the NIRSAL Microfinance Bank for households and SMEs that had been particularly hard hit by COVID-19, including but not limited to hoteliers, airline service providers, and healthcare merchants among others.
• Credit support for the Healthcare industry: CBN introduced this to meet the potential increase in demand for healthcare services and products. The apex bank offers loans to pharmaceutical firms in Nigeria, as well as to hospital and healthcare practitioners, who intend to expand/build the health facilities to first-class centres.
• Regulatory forbearance: It also grants all Deposit Money Banks leave to consider temporary and time-limited restructuring of the tenor and loan terms for businesses and households most affected by the outbreak of COVID-19, particularly Oil & Gas, Agriculture, and manufacturing.
• Strengthening of the CBN LDR policy: With the success of the LDR policy in growing credit to the economy and reducing interest rates, the CBN offered support to industry funding levels to maintain DMBs’ capacity to direct credit to individuals, households, and businesses. It added additional incentives to encourage the extension of longer-tenured credit facilities.
MARCH 20, 2020
• The CBN officially devalued the naira by 15% moving from N307/$1 to N360/$1. Depreciation at the “market-determined” I&E window is 5%, having moved from N360/$1 to N380/$1.
• CBN sold dollars to banks at N380/$1 in a move signifying a devaluation of the currency. Banks trading at the Investor and Exporter (I&E) window bought dollars at N360/$1 from the CBN on Friday, March 20, 2020. The I&E window is the official market where forex is traded between banks, the CBN, foreign investors, and businesses.
MARCH 24, 2020
The Monetary policy committee unanimously voted to:
• Retain the MPR (Monetary policy Rate) at 14%.
• Retain the asymmetric corridor at +200/-500 basis points.
• Retain the CRR (Cash Reserve ratio) at 27.5% and retain liquidity ratio at 30%.
MARCH 25, 2020
Following the request of the Association of Bureau de Change Operators of Nigeria (ABCON) to declare market holiday on its members’ weekly bidding, the CBN suspended the sales of foreign exchange to operators of Bureau de Change.
MARCH 27, 2020
CBN and the Banker’s Committee formed the Nigerian Private Sector Coalition Against COVID-19. The apex bank explained that the coalition was in partnership with the private sector, led by Aliko Dangote Foundation and Access Bank.
MARCH 30, 2020
• CBN suspended the clearing of all cheque instruments in the Nigerian Clearing System. According to the bank, the directive was intended to “ensure hitch-free clearing and settlement activities” during the previous 14-day lockdown.
CBN’s suspension was based on the earlier envisaged two-weeks lockdown which was later extended to about 5 weeks.
APRIL 14, 2020
In preparation for post-COVID-19, CBN announced four major areas of focus. They are:
• Provision of affordable housing: Here the CBN will create an intervention fund which will target housing construction by developers who provide proof of profiled off-takers with the capacity to repay the loan.
The BVN will be used to verify the information given by the off-takers before the developers can access the facility. The CBN will also assist the mortgage finance sub-sector, assist land administration agencies at the states to build capacity for prompt processing and issuance of land titles.
• Renewable energy: The CBN, over the next three years, will be providing financial support to environmentally friendly energy production, as this has tangential long term health benefits.
• Cutting edge research: Also, the bank will be providing funding and encouraging efforts aimed at driving innovation and research in every sector through our universities, research institutions, creative industry initiatives and so on.
• Light manufacturing: The apex bank plans to set up a N500 billion intervention fund over a medium, and targeted at manufacturing firms for the procurement of state of the art machinery and equipment and automated manufacturing models that would fast track local production. It will also help increase the patronage of locally processed products.
CBN intends to close the funding gap needed for the replacement of machinery and equipment in order to enhance local production.
APRIL 28. 2020
The apex bank lifted the temporary suspension placed on cheque clearing in the country with effect from Tuesday, April 28, 2020.
In the circular, it explained that it lifted the suspension in furtherance of its efforts in the development of a safe and efficient payment system in the country.
IMF loan
The executive board of the International Monetary Fund (IMF), approved $3.4 billion as Rapid Financing Instrument (RFI) as fiscal support to Nigeria during this period of coronavirus pandemic.
The fund that was requested by Nigeria is to be used to mitigate the impact of the coronavirus pandemic on Nigeria’s economy as the country grapples with dwindling government revenue and an economic crisis following the crash of crude oil prices globally.
APRIL 29, 2020
CBN resumed the sales of dollars to SMEs who need foreign exchange for essential imports, as well as Nigerian students in foreign schools who need to pay their school fees.
This comes as the world-wide COVID-19 lockdown begins to ease up, even as business activities are expected to gradually return to normal. In view of the gradual easing of the COVID-19 lockdown both globally and in Nigeria
APRIL 30, 2020
CBN extended the deadlines issued to Microfinance banks (MFB) to comply with its revised minimum capital requirements.
MAY 2, 2020
The Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) Microfinance bank, on behalf of the Central Bank of Nigeria (CBN), started the disbursement of the N50 billion Targeted Credit Facility (TCF) to beneficiaries.
The facility is a stimulus package which was introduced by CBN, to help mitigate the impact of the coronavirus pandemic on households and MSMEs.
MAY 3, 2020
CBN and the Bankers’ Committee ordered all banks in the country not to retrench or lay-off any staff of any cadre (either full-time or part-time). The apex bank also said that its approval must be sought if it became absolutely necessary to lay-off any such staff.
MAY 10, 2020
CBN assured foreign investors that repatriating their funds from the country was secured despite forex related revenue shortages due to the drop from the sale of crude oil globally.
The apex bank had put in place policies to ensure an orderly exit for those that might be interested in doing so and also urged investors to be patient as such repatriations were being processed, owing to the Bank’s policy of orderly exit of investments.
MAY 12, 2020
CBN disclosed that it was developing a framework to provide financial support to aid the fight against Coronavirus Disease in the country.
According to Emefiele, the fund would be released as soon as the vaccine was validated by health authorities.
Source: Nairametrics
