CBN to create fund to fight coronavirus

Central Bank of Nigeria will create a N50 billion fund to combat the impact of the coronavirus pandemic on Africa’s biggest economy and allow banks to give their customers more time to repay loans, its governor said on Monday.

Godwin Emefiele announced the support package at a press conference in the capital, Abuja. Africa’s top oil producer, which has had two confirmed cases of the virus, has been hit hard by low crude prices caused by lower demand from China and a price war between Saudi Arabia and Russia.

He said credit support for the health sector aimed to meet “potential increase in demand”. It was intended for loans to pharmaceutical companies planning to expand or establish drug manufacturing plants in Nigeria and to health companies that wanted to build hospitals and clinics.

Other measures announced include cutting interest rates on some central bank loans to 5% per annum, down from 9%, for one year.

“The CBN (Central Bank of Nigeria) stands ready to provide liquidity back stops as and when required in view of its role as banker to the federal government and lender of last resort,” said Emefiele. The bank on Thursday reacted to speculation about a possible devaluation of the naira by saying “market fundamentals” did not support such a move.

Reuters