CBN Will Provide N1.8trn Out Of N2.3trn Economic Sustainability Plan—-Emefiele

Out of the N2.3trn Economic Sustainability Plan of the Federal Government aimed at cushioning the negative impact of Coronavirus pandemic on the economy, the sum of N1.8trn would be provided by the Central Bank of Nigeria.

The CBN Governor, Mr. Godwin Emefiele said this while briefing journalists at the end of the two day Monetary Policy Committee meeting.

The N2.3trn Economic Sustainability Plan had been endorsed by the National Economic Council and the Federal Executive Council.

The Economic Sustainability Plan would last for one year focusing on achieving mass employment and
mass domestic production that are not dependent on importation or foreign exchange expenditure.

The Federal Government had said it opted for the N2.3tn stimulus package because of the limited fiscal space and the scale of the country’s
economic challenge.

A breakdown of the N2.3trn package showed that N500bn would come from Special Accounts; while N1.1tn would be injected into the economy through structured lending from the Central Bank of Nigeria.

In addition, the one year economic blueprint stated that about N334bn would be sourced from external bilateral/multilateral organisations while N302.9bn would come from other funding sources not stipulated in the document

Speaking on the funding, Emefiele said, “CBN is set to contribute over N1.8trn of the total sum of N2.3trn needed for the Federal Government’s one year Economic
Sustainability Plan, through its various financing interventions using the channels of Participating Financial Institutions.”

Emefiele appealed to stakeholders to take advantage of these intervention initiatives to help support a quick rebound in economic growth.

Giving an update on the intervention disbursements by the apex bank to reflate the economy, improve aggregate supply and drive down inflation, the Governor said the apex bank had released N3.5trn to various sectors of the economy.

He said, “So far, total disbursements from the Bank’s interventions in the wake of the COVID-19 pandemic amount to N3.5trn including Real Sector Funds, (N216.87bn); COVID-19 Targeted Credit Facility (N73.69bn); AGSMEIS, (N54.66bn); Pharmaceutical and Health Care Support Fund, (N44.47bn); and Creative Industry Financing Initiative (N2.93bn).”

Under the Real Sector Funds, he said a total of 87 projects that include 53 Manufacturing, 21 Agriculture and 13 Services projects were funded.

In the Health Care sector,the Governor said 41 projects which include 16 pharmaceuticals and 25 hospital and health care services were funded.

Under the Targeted Credit Facility, he said 120,074 applicants have received financial support for investment capital.

He noted that the Agri-Business/Small and Medium Enterprise Investment Scheme intervention has been extended to a total of 14,638 applicants, while 250 SME businesses,predominantly the youths, have benefited from the Creative Industry Financing Initiative.

On the persistent uptick in inflation, the CBN governor said members of
the MPC were deeply concerned about the development. 

He noted that the persistent rise in inflation  was driven primarily by legacy structural factors such as the inadequate state of critical
infrastructure and broad-based security challenges across the country, which dampened production activities.

Other factors, according to him include the disruptions to supply chains following restrictions to movement to curb the spread of the pandemic, adverse weather conditions, which resulted in flooding of farmlands as well as
the inflation pass-through to domestic prices following the
depreciation in the exchange rate.

He added that the recent increase in energy cost is also expected to further impact the domestic price level in the short-term.

Emefiele said the committee lauded resumption of forex sale to the
Bureau de Change in a bid to improve liquidity and ease demand
pressure in the foreign exchange market.