The Central Bank of Nigeria (CBN) has extended the 5 percent per annum interest rate on its intervention facilities for one year.
The extension, which takes effect retrospectively on February 28, 2022, was announced in a circular to all banks and other financial institutions (OFIs) and signed by Chibuzo Efobi, director, financial policy and regulation at the CBN.
According to the circular with the title, ‘Regulatory Forbearance for the Restructuring of Credit Facilities impacted by Covid-19 and dated March 15, 2022, further enquiries should be addressed to the director, development finance department at the CBN.
On March 3, 2021, the CBN extended the discounted interest rate for its intervention facilities by 12 months to February 28, 2022.
Also, on March 1, 2020, the CBN reduced the interest rates on its intervention funds from 9 percent to 5 percent per annum for one year period.
The reduction was part of measures to mitigate the negative impact of Covid-19 pandemic on the Nigerian economy.
Also, credit facilities, availed through participating banks and OFIs were granted a one-year moratorium on all principal payments with effect from March 1, 2020.
The Monetary Policy Committee (MPC) at its last meeting in January 2022 reviewed the performance of the Central Bank’s intervention programmes aimed at stimulating productivity in manufacturing/industries, agriculture, energy/infrastructure, healthcare and Micro, Small and Medium Enterprises (MSMEs).
The Committee, however, expressed confidence in the Bank’s sustained intervention programmes, noting that inflation will continue to abate as food supply improves
The MPC was convinced that various measures being implemented were helping, not only in boosting output growth but also in moderating inflation.
The MPC therefore, enjoyed Management to continue to use its development finance tools to accelerate output growth, which will also help in boosting manufacturing output that would ultimately aid moderation in prices. It also requested Management to continue its use of administrative measures, including discretionary tools at its disposal through CRR to control the money supply in the economy.
“CBN intervention programmes remain a vital component of lowering inflation and facilitating economic growth, However, it is important to rationalize the programmes, with a view to strengthening the components of the intervention that promote economic expansion, poverty reduction and employment generation,” Festus Adenikinju, member of the MPC said in his personal statement at the last meeting.
In her personal statement, Aisha Ahmad, deputy director, financial systems stability Directorate of the CBN, said the importance of ongoing CBN interventions in critical output enhancing sectors of the economy and the need for coordinated monetary and fiscal policy efforts at holistically tackling our underlying structural challenges.