CBN loans to real sector, businesses rise by N4tr in one year
Loans granted by the Central Bank of Nigeria (CBN) to manufacturing, agriculture, power, and the financial sectors rose 21.1 per cent from N19.4 trillion to N23.5 trillion in the past one year.
CBN Governor Godwin Emefiele disclosed that agriculture, manufacturing, power, and healthcare received the lion share.
He said the CBN allowed banks to restructure loans granted sectors severely affected by the pandemic and strengthened Loan to Deposit Ratio policy, which led to a significant rise in loans provided by financial institutions.
The CBN working with the fiscal authorities created a N50 billion target credit facility through the NIRSAL Microfinance Bank, out of which N363.5 billion has been disbursed to more than 767,000 households and micro businesses, he disclosed.
Emefiele said in a ‘state of the economy and financial sector report’ that the CBN also mobilised the Private Sector Coalition Against COVID-19 (CACOVID) team that raised N39.646 billion for the fight against the scourge, per reporting by The Nation.
He announced N1 trillion in loans for production across sectors, from which 53 manufacturing projects, 21 agriculture projects, and 13 service projects are being funded.
The CBN also created a N100 billion fund for pharmaceutical companies and healthcare practitioners to expand and strengthen their capacity.
“We have increased this fund to N200 billion to accommodate more players in the healthcare sector, such as phytomedicine practitioners and manufacturers of medical devices and vaccines.
“Our primary focus is to create a hub where medical officers can have access to diagnostic equipment to carry out quality medical services at an affordable price for Nigerians.”
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Efforts to mitigate pandemic impact
CBN data shows that N107.7 billion has been released to support 114 healthcare projects, including six greenfield (new) and 108 expansionary (brownfield).
“The projects financed included cancer treatment centres, medical diagnostics, pharmaceuticals, dental services, eye clinics, and other healthcare service providers.
“We are happy to inform you that the intervention programmes have contributed to the increased bed space in our hospitals, and improved healthcare productivity as evident in the increased number of successfully treated Covid 19 patients.
“These developmental initiatives combined with our monetary and financial policies have helped to support the recovery of our economy and in re-aligning general macroeconomic conditions,” Emefiele explained.
He said the loans came after the CBN worked with the fiscal authorities to institute strong policy support measures capped under the Economic Sustainability Plan (ESP).
The ESP is designed to contain the effects of the pandemic, restore stability to the economy by helping households and businesses, and lift the economy out of the woods through intervention to critical sectors.
“Under this plan, the monetary and fiscal authorities collectively mobilised and injected over N5 trillion to support households and businesses.
“It is gratifying to state that the Central Bank of Nigeria deployed more than N3.5 trillion, – about 4.1 per cent of Nigeria’s Gross Domestic Product (GDP) – to critical sectors such as agriculture, manufacturing, electricity, and healthcare in order to stimulate and help the economy recover from the deep shock.
“Other specific policy measures, outside loans, undertaken to stabilise the economy and businesses in the face of the pandemic, include reduction of the monetary policy rate from 13.5 to 11.5 per cent to improve the flow of credit to households and businesses.”
The CBN also reduced the interest rate on its intervention loans from 9 to 5 per cent, and extended moratorium on principal repayments to March 2022.
Economic recovery
Emefiele said these measures have led to a robust economic recovery as GDP growth stood at 4.03 per cent in the third quarter of 2021 (Q3 2021) after 5.01 per cent growth in Q2 2021.
The economy has remained on a positive growth path for four consecutive quarters after the recession in Q3 2020, he added.
Some 41 out of 46 sectors assessed in Q3 2021 by the National Bureau of Statistics (NBS) recorded positive growth – driven by improvements in non-oil, particularly agriculture, manufacturing, trade, ICT, construction, finance, and transportation.
“Today, our food production systems have become more sustainable due to the improved output at our farms and local factories.
“Output of staple commodities such as rice, maize, palm oil and tomatoes have grown significantly, and we have also seen increased efforts of our local manufacturing firms to engage in backward integration efforts.”
