How CBN’s N736bn COVID-19 interventions paved way for Nigeria to exit recession
... as 3.8m individuals, SMEs, projects benefit … N98.28bn disbursed so far in 2021
Aggressive interventions by the Central Bank of Nigeria (CBN) to offset the negative repercussions of the COVID-19 pandemic played a significant role in Nigeria’s unexpected exit from recession as growth beat global forecast, according to BusinessDay findings.
Between 2020 and February 2021, the CBN disbursed an estimated N736.67 billion intervention fund to over 3.8 million individuals, SMEs and public projects, data analysed from the apex bank show.
The interventions, according to the apex bank report, were disbursed through schemes that include the Anchor Borrowers’ Programme (ABP), the Manufacturing Intervention Scheme (CMIS), Targeted Credit Facility (TCF), Agri-business/Small and Medium Enterprise Investment Scheme (AGSMEIS), Healthcare Sector Intervention Facility (HSIF), Nigeria Youth Investment Fund (NYIF), and the mass metering programme.
The impacts of the CBN’s interventions were largely felt by the non-oil sector, an area the government is trying to make the main growth sector. The real sector rose 1.69 percent in the fourth quarter of 2020, the strongest rate in four quarters.
Crop production, food manufacturing, telecoms, real estate, and construction drove the growth in the reviewed quarter.
“Given everything we have done, both by the monetary and fiscal authorities, we should come out of recession by the fourth quarter. But if we don’t, then we should in the first quarter,” the CBN governor, Godwin Emefiele, said at the January MPC meeting, saying he was optimistic that Nigeria was going to be out of recession in the fourth quarter of last year.
Despite a full-year contraction of 1.92 percent in 2020, data by the National Bureau of Statistics (NBS) show that Nigeria’s economy surprisingly exited recession in the fourth quarter of last year with a Gross Domestic Product growth of 0.11 percent in the three months through December from a year earlier.
The World Bank had projected a 4-percent contraction in 2020, with the International Monetary Fund (IMF) forecasting 3.2 percent.
“The authorities have undertaken commendable and timely measures to save lives and livelihoods. The CBN took a series of measures to support the health sector and the broader economy, including higher subsidies on credit intervention facilities and regulatory forbearance to ease debt service,” IMF said in its 2020 Article IV Consultation for Nigeria.
Interest rate cut on CBN intervention loans from 9 to 5 percent and a one-year extension of the moratorium on principal repayments for CBN facilities to businesses, which was approved to minimise economic scarring, were some of the catalysts adopted by the apex bank to offset the impact of the pandemic.
A CBN report, which contains details of the many interventions of the apex bank as seen by BusinessDay on Wednesday, shows that the bank has disbursed over N98.28 billion worth of interventions funds between January 2021 and February 19.
“N4.365 billion has been disbursed for five real sector projects under COVID-19 Manufacturing Intervention Scheme (CMIS): while N232.148 billion has been disbursed for 72 real sector projects under CMIS from January 2020 till February 19th,” according to the report.
The sum of N204.291 billion was said to have been disbursed under the TCF to 447,671 beneficiaries as of February 12, 2021. Out of this, 389,442 individuals received N137.253 billion and 58,229 SMEs received N67.038 billion as disbursements.
The sum of N111.627 billion, which was disbursed under AGSMEIS, was received by 28,961 beneficiaries as of February 12, 2021, the apex bank said.
According to the report, 81 healthcare projects have been funded to a tune of N83.891 billion under the healthcare sector intervention facility (HSIF) as of February 19, 2021.
Out of the N83.891 billion disbursed under the facility, the CBN said N2 billion was channelled to one cancer centre; N0.075 billion to one funeral service; N4.960 billion was disbursed to six laboratories/diagnostics; N36.840 billion was disbursed to 26 pharmaceutical projects, while N40.01billion was disbursed to 47 hospitals and other health services.
“From the inception of the ABP the sum of N572.530 billion has been disbursed to 2.9 million farmers. While for the ABP 2020 Wet Season N191.041 billion was disbursed to 850,523 farmers. In the 2020 Dry Season, N78.920 billion has been disbursed to 433,817 farmers,” it said.
Other schemes were also not left out in the CBN interventions.
The sum of N668.545 million, according to the regulator, has been disbursed under the Nigeria Youth Investment (NYIF) to 896 beneficiaries as at February 12, 2021. Out of this 447 individuals received N174.3 million and 399 SMEs received N494.245 million.
“The bank has disbursed N25.12 billion for the procurement of 460,050 meters under the Mass Metering Programme. The disbursements were done to Benin, Enugu, Ibadan, Ikeja, Jos Kaduna, Kano, Port Harcourt and Eko Discos. One million meters are expected to be procured by end Q1 2021,” it said.