The rise of the global pandemic, COVID19 has immensely affected the world as we know it. Nearly every part of the world has been affected, governments around the world are struggling to defeat this common enemy.The social and more importantly economic damage this disease has caused is one that would take months or years for some to recover from.
For Nigeria, it is a multi-faceted war because we are not only faced with a rapidly spreading pandemic, we have another pandemic to defeat in the coming months; recession.
A country whose 95% budget relies heavily on crude oil sales would definitely not escape the looming fall of our economy. Due to the fact that the constant decrease in oil prices is not majorly caused by the pandemic, this may last even after we have contained the coronavirus disease.
Some employees may come out of this without a job, some businesses would shut down because they would be unable to pay salaries and maintain workers. Even the mandatory lockdown has rendered some companies out of business eg: Travel Agents, FMCG companies etc. Investment flows will shut down because investors will run to low risk assets such as US government bonds. As far back as early February, some foreign investment banks have discouraged investors from countries like Nigeria and Venezuela.
The CBN has since borne the brunt of protecting the economy from COVID19 induced downfall with different policies as mentioned below:
1. Any individual or business with a CBN related loan has the option of deferring payment for another year.
2. All interest rates on CBN intervention loans have been reduced from 9% to 5% in order to reduce the debt burden on those who took intervention loans.
3. The CBN has set aside 1 trillion naira to support local manufacturers which will substantially reduce dependence on imports.
4. The CBN has created 50bn naira for SMEs affected by the COVID19 crisis.
5. The CBN has set up a credit line of 10bn naira for individuals and businesses in healthcare eg, pharmacies, labs, health facilities.
6. The CBN is initiating a 1.5 bn naira private sector infrastructure fund to finance infrastructure projects.
With these arrangements in store, many experts to do not think this will be enough to cushion the alarming effect of the COVID19 pandemic. It is however, a step in the right direction.