•Back N3.5tr Economic Stimulus Package
•Apex Bank Directs Oil Firms To Stop Forex Sale To NNPC
Days after announcing a N1tr package aimed at stimulating the nation’s economy and steering it off the path of recession, amidst the Coronavirus scourge that continues to ravage countries across the globe, the Central Bank of Nigeria (CBN), on Saturday sought the support and understanding of chief executives of banks and allied institution, as it moves to inject funds to critical sectors. One of them at this time is local pharmaceutical giants, a move that could make the country become self-sufficient in that area.
In a communiqué at the end of an extraordinary meeting held in Lagos on Saturday, March 21, 2020, the CBN and the bank CEO under the aegis of the Bankers’ Committee, pledged to grant funding facilities (in Naira and foreign exchange) to pharmaceutical companies in the country to enable them procure raw materials and equipment to boost local drug production in Nigeria.
According to Godwin Emefiele, the CBN governor, the particular attention being paid to Nigeria’s health industry, arises from the fact “that this crisis is first and foremost a public health crisis.
“As aforementioned, global supply chains have been disrupted including dominant drug supply channels from China and India. In fact, many countries have or are planning to ban the export of drugs and medical supplies from their countries. Clearly, we have no choice but to produce these items locally,” he added.
The cocktail of policy measures at this time, the CBN governor continued is because stakeholders in the banking industry have “learnt lessons from previous crisis including the 2008 global financial crisis and the oil price slump of 2016, which will be applicable and position the industry to better deal with this crisis.”
The Bankers’ Committee also gave its full support to the over N3.5tr funds for key sectors of the economy, earlier announced by the CBN in response to the impact of the COVID-19 on Nigeria.
Companies billed to benefit from the package include Emzor, Fidson, GSK, May & Baker, Unique Pharma, Swiss Pharma, Neimeth, Sagar, Orange Drugs, and Dana Pharma.
Emefiele further said the meeting resolved to collaborate and fashion one coherent strategy to provide confidence to the customers, counterparties, the public and ultimately putting Nigeria first.
Considering the disruptions to global supply chains, participants urged Nigerians and companies to prioritize their import needs, focusing more on sourcing raw materials and input locally.
He said the CBN will engage correspondent banks, trade creditors, and trading partners regarding existing letters of credit and trade commitments while assuring that the industry was committed to resolving all existing commitments in a comprehensive and orderly manner.
The meeting, Emefiele continued, also resolve that profit would not be the primary motive at this time, stressing that the need to preserve “confidence, financial stability and support for the economy will be the overriding objectives.”
It will be recalled that in the past week, the CBN, in response to the economic impact of the COVID-19 on Nigeria, had announced policy measures such as the additional moratorium of one year on CBN intervention facilities, interest rate reduction on intervention facilities from 9% to 5%; the activation of the N1.5tr InfraCo Project for building critical infrastructure; the strengthening of the lending to deposit ratio policy, additional N100bn intervention in healthcare loans to pharmaceutical companies; and the N1tr in loans to boost local manufacturing and production across critical sectors.
To improve foreign exchange supply to the CBN, the Bank directed all international and domestic oil companies and related companies such as oil servicing companies to sell foreign exchange to the CBN and no longer the Nigerian National Petroleum Corporation (NNPC).