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Nigeria: Central Bank Disburses U.S.$126 Million for 80,000 Beneficiaries to Cushion Effect of COVID-19

The Central Bank of Nigeria (CBN) has so far disbursed N49 billion out of its N50 billion Targeted Credit Facility meant to cushion the impact of the COVID-19 on the economy, report notes.

Also, its Business Expectations Survey Report for June 2020 shows that at -24.3 index points, the overall confidence index (CI) indicated respondents’ pessimism on the overall macro economy in June while the respondents are optimistic in their outlook for July.

Respondents are optimistic in their outlook for July despite the Confidence Index (CI) at -24.3 on the overall macroeconomy in June, according to the Business Expectations Survey Report for June 2020.

CBN’s Director, Corporate Communications, Mr. Isaac Okorafor makes a disclosure during a telephone interview, that about 80,000 operators of micro, small and medium scale enterprises (MSMEs) and families have benefitted from the intervention fund.

He said the fund was expected to support the federal government’s measures to stimulate economic activities as well as to help the economy avert a looming economic recession.

“So far, out of the N50 billion targeted credit facility for households and small businesses, we have disbursed about N49 billion. We also have other intervention funds such as the N100 billion healthcare facility, whose disbursement is ongoing as well,” he stated.

The apex bank had earlier released guidelines for the disbursement of the special intervention fund.

The NISRAL Microfinance Bank (NMFB) served as the disbursing financial institution. Also, the fund is meant for SMEs, households, and enterprises that have verifiable evidence of livelihood and evidence of business activities adversely impacted by the pandemic.

The guidelines for the fund had listed sectors eligible for the credit facility to include agric value chain, hospitality, health, airline service providers, manufacturing/value addition, trading as well as any other income-generating activities as may be prescribed by the CBN.

The scheme is being financed out of the CBN’s N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF).

Out of the fund, the CBN had earmarked a maximum facility of up to N25 million for MSMEs while households can access up to N3 million based on the activity, cashflow and industry/segment size of a beneficiary.

“Working capital shall be a maximum of 25 per cent of the average of the previous three years’ annual turnover; where the enterprise is not up to three years in operation, 25 per cent of the previous year’s turnover will suffice.

“Interest rate under the intervention shall be five per cent per annum all-inclusive up to 28th February 2021 and thereafter, the interest on the facility shall revert to nine per cent as from 1st March 2021,” part of guidelines for accessing the fund had stated.

CBN’s Survey Shows Optimism on Economy in July

The CBN’s Business Expectations Survey Report for June 2020 posted on its website has shown that at -24.3 index points, the overall confidence index (CI) indicated respondents’ pessimism on the overall macroeconomy for June.

However, it stated that respondents were, optimistic in their outlook for July with a confidence index of 31.8.

The survey indicated that respondents expressed optimism in the overall business outlook in August and December 2020. This also shows greater confidence in the economy, at 47.4 and 67.8 index points, respectively.

“Respondents’ outlook on the volume of total order, financial conditions (working capital), access to credit and average capacity utilization all remained negative, at -22.9, -21.7, -19.0 and -12.5 index points, respectively.

However, “Respondents were, optimistic about the volume of business activity in June 2020 as the index stood at 47.4 points.

“The breakdown by sector showed that agric/services sector had the highest prospect for employment in the next month. This is with an index of (5.7 points) followed by the manufacturing sector (4.9 points), wholesale/retail trade (3.1 points). Respondents were also optimistic about the volume of business activity and employment outlook index in the next two and six months as all indexes were positive,” the report added.

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