COVID-19: CBN, DBN expend over N5.4trn in one year

By Omodele Adigun

In order to keep the economy afloat in the face of the COVID-19 pandemic, the Central Bank of Nigeria (CBN) and Development Bank of Nigeria (DBN) have so far expended over N5.4 trillion between 2020 and 2021 just as Bank of Industry (BoI) has, in its vault , N599 billion loans ready for disbursement, investigation has shown.

Put together, if BoI finally disburses the loans to its beneficiaries, the three development financial institutions will have spent N6.030,410 trillion within one year just to contain the global pandemic.

Giving insight into the apex bank’s interventions, its Governor, Godwin Emefiele, disclosed at the 14th annual conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja  that “mobilization of key stakeholders in the Nigerian economy, through the CACOVID alliance, led to the provision of over N23 billion in relief materials to affected households, and the set-up of 39 isolation centres across the country; loans granted to the private sector rose by N3 trillion between July 2020 and July 2021 because of continued implementation of our Loan-to-Deposit Ratio (LDR) policy; deployment of over N756 billion to 3.7 million farmers cultivating over 4.6 million hectares of farmland under the Anchor Borrowers Programme (ABP); deployment of N440 billion to 711,706 beneficiaries under the Agribusiness/Small and Medium Enterprises Investment Scheme (AGSMEIS) and the Targeted Credit Facility (TCF) being run by the NIRSAL Microfinance Bank; disbursement of N98.41 billion in loans to support 103 healthcare projects, of which 26 are pharmaceutical companies and 77 are for healthcare institutions. These funds are helping to expand and strengthen the capacity of our healthcare institutions and the provision of N923 billion in loans to support 251 real sector projects, which has helped in boosting local manufacturing and production across critical sectors.”

As for Development Bank of Nigeria (DBN), its intervention in 2020 alone stood at N191.9 billion via disbursement to Micro, Small, and Medium Enterprises (MSMEs), representing 89 per cent increase when compared to N101.5 billion recorded in 2019. This is contained in a document from the Federal Ministry of Finance, Budget and National Planning on the performance of some key agencies and social investment and poverty alleviation by the Federal Government.

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In his recent interview with African Banker, the Managing Director/ CEO of BoI, Mr Olukayode Pitan, explained various interventions by the bank to cage the pandemic from ruining the economy.

He said: “As the pandemic began to take its toll on the Nigerian economy, the bank sought partnerships with the Federal Government to manage programmes that would alleviate its negative effects. Some of these programmes included the N75billion MSME Survival Fund: The bank is currently managing the execution of the Nigeria Economic Sustainability Plan MSME Fund (NESP-F) aimed at reviving and re-establishing MSMEs in Nigeria in the wake of the COVID-19 pandemic.  A component of the NESP-F is the N75billion MSME Survival Fund, which comprises a N60billion payroll support programme and Artisan Transport Grant, and a N15billion Guaranteed Off-take Scheme. The fund is to be disbursed as grants to support vulnerable MSMES in meeting their staff obligations and to secure jobs within the MSME space from the adverse effects of the pandemic. The scheme is aimed at securing over 1.7million jobs.

 “The bank was also selected to manage the N50billion export expansion fund, which is expected to develop and promote export initiatives. This includes providing financial support to organisations in the non-oil export value chain negatively affected by COVID-19, as well as developing export opportunities and programmes that the Nigerian Export Promotion Council (NEPC) may identify.  The fund also serves as a source of supplementary funding for dealing with high costs of production, marketing and distribution, arising mainly from infrastructure deficiencies and other ancillary factors beyond the control of exporters. 

“In March 2020, BoI successfully closed a €1billion syndicated guaranteed loan facility. The purpose of the deal has been to enhance the capacity of BoI to effectively support micro, small, medium, and large enterprises across key sectors of the Nigerian economy with affordable loans of medium to long-term tenor, alongside moratorium benefits. It is expected that this support will help revitalise Nigeria’s industrial sector. In addition, we improved our capacity to support Nigerian enterprises by raising about $2.1billion from the international debt capital market in 2020.”

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