CBN, BOI Support for MSMEs Provided Cushion for Citizens During COVID-19

Post-pandemic, one of the Gbajabiamila-led House of Representatives (HoR) priorities was to recover the dwindling economy after the challenges it faced during the COVID-19 pandemic. The House noted that it was going to advocate for the Central Bank of Nigeria (CBN), Bank of Industry (BOI) and other federal government financial institutions to extend the grant moratoria on debt services.

The House of Representatives in its revised Legislative Agenda noted that “the prospects of recovery for the country in 2021 after the pandemic is very difficult to predict, making it difficult for economic activities across sectors to bounce back to pre-crisis state quickly” Therefore, they were focused on pushing moratoria on debt services, especially for MSMEs.

Promise: Moratoria on Debt Services: House to advocate for the CBN, BOI and other FGN finance institutions to grant moratoria on debt service to Micro, Small and Medium Enterprises (MSMEs) e.g., those on the Anchor Borrowers Program, some of whom are the most badly hit by the COVID-19 pandemic.  

Significant progress was achieved in this pledge as several House committees continue to work closely with these institutions. In March 2020, CBN released a press statement to announce that all CBN intervention facilities are hereby granted a further moratorium of one year on all principal repayments, effective March 1, 2020. Also, there was a reduction in interest rate from 9 to 5 per cent per annum for 1 year.

During this period, Speaker Gbajbiamila was also advocating for an “all-inclusive relief package for Nigerians” to cushion the effects of the COVID-19 pandemic on the people.

“I look forward to listening to what is on the ground, and I’m even looking forward to more input from the National Assembly when it is time for us to make an input.”

“Because as it is often said, two heads are better than one, and we have one government. The National Assembly will not act unilaterally neither will the executive. We will work together for the best outcomes for the people whom we serve,” said Gbajabiamila in a statement made available to the press.

Similarly, the BOI through its managing director Kayode Pitan announced that the bank will be reducing the interest rate on its direct line of credit by 2 per cent for a year, effective from April 1, 2020, to March 31, 2021. 

The extension of moratorium for MSMEs by CBN was further extended till August 2022. This support according to CBN provided a calm in the economy. This means the apex bank extended its grant repayment for all its credit facilities (including Anchor Borrowers) for an additional 1 year and 5 months.

“The CBN policy response to COVID-19 has thus provided a calm in the economy, helping manufacturers to continue production and keep plants running to meet domestic demand without arbitrary price hikes to account for the rising cost of raw materials.”

We rate this Promise Kept.

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