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Coronavirus: Stakeholders applaud CBN’s interest rate reduction

Stakeholders in the country’s agricultural sector have applauded the Central Bank’s on its recent interest rate reduction on intervention funds from nine to five percent as part of measures to support businesses hit by COVID-19 outbreak in Nigeria.

 

The stakeholders say the step by the apex bank is the right step to help agribusinesses survive the difficult moment of the novel virus outbreak and low oil price.

 

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“The food sector is the most critical for our economy, especially at this time of low oil price and coronavirus outbreak,” said Ibrahim Kabiru, national president, All Farmers Association of Nigeria (AFAN).

 

“The CBN’s support is very crucial at this time and we commend them for the recent reduction of interest rate on intervention funds from nine to five percent,” Kabiru said.

 

He noted that the reduction will encourage farmers to grow more, thereby, boosting food supply.

 

Since December when the outbreak of the virus was reported in China, it has spread to over 166 countries with over 341,000 cases and 14,700 deaths.

 

Nigeria, Africa’s most populous country has reported 36 cases of the coronavirus.

 

To contain the pandemic, cities, and regions across Europe and Asia have been by and large shutdown, putting halt to economic activities and obstructing supply chain as well as trade between countries.

 

Many agribusinesses and farmers in Nigeria are feeling the heat as the export supply chain has been grounded on suspended freight.

 

In a move to protect them from the economic disruptions amid the coronavirus spread, the country’s apex bank announced a N50billion facility through the Nigeria Incentive –Based Risk Sharing System for Agricultural Lending (NIRSAL) microfinance bank for households and Small and Medium-sized Enterprises (SMEs) that have been hit by the COVID-19.

 

“It is a good initiative by the apex bank but we would want the reduced interest rate to remain the same even after the outbreak,” AfricanFarmer Mogaji, head-agribusiness group, Lagos Chamber of Commerce and Industry (LCCI) said in a phone response to questions.

 

“Agric is long term and whatever support the bank is providing must also be long term,” Mogaji who is also the chief executive officer of FarmCredit said.

 

However, as the apex bank continues to roll out palliative policies for the various businesses, there are questions around how the businesses will manage especially the MSMEs that engage actively in wholesale and retail trade.

 

There are concerns about currency stability and disruption to global supply chains remains critical despite the slowdown in the spread of the disease in China which might improve the latter.

 

A national survey of MSMEs conducted by the National Bureau of Statistics (NBS) in 2017 shows that the country has 41.5 million MSMEs scattered across various sectors. The data also affirms that about 73 percent of these MSMEs fully engage in wholesale and retail trade activities with China as a principal partner.

 

Experts said this is a bleak period for many companies especially the MSMEs because no country has been able to arrest the virus neither does anyone know when it will be over.

 

Josephine Okojie

 

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