On the back of the recovery seen in the economy in the last one year, the Central Bank of Nigeria (CBN) said Nigeria’s economy still remains fragile.
Godwin Emefiele, governor, CBN, disclosed this at the opening of the two-day 12th Bankers’ Committee Retreat which began in Lagos on Tuesday. The theme of the retreat is ‘Building Resilience for Economic Growth’.
“The CBN is focused on strengthening the fundamentals of the Nigerian economy, by using mostly innovative and sometimes extraordinary measures to diversify the economy, boost domestic productivity, and reduce our import dependence. “Though the economy is recovering, growth remains fragile, below potential”, Emefiele said.
In support of the recovery efforts, Emefiele said the bank deployed more than N3.5 trillion, which is about 4.1 percent of Nigeria’s GDP, to support critical sectors including agriculture, manufacturing, healthcare, electricity, and construction.
He said, “Other CBN policy measures that we took to help the economy recover include, a reduction of the monetary policy rate from 13.5 percent to 11.5 percent to spur lending, reduction of the interest rate on all CBN intervention loans from 9 percent to 5 percent and extension of the moratorium on principal repayments for CBN intervention facility to March 2022.
“Others are regulatory forbearance for banks to restructure loans to sectors severely affected by the pandemic, creation of a N400 billion Targeted Credit Facility for households and small and medium enterprises. Of this, nearly N370 billion has been released to over 800,000 beneficiaries and introduction of a N1 trillion facility for local manufacturing and production in critical sectors. So far, 53 manufacturing, 21 agriculture-related, and 13 service projects are being funded from this facility.
“There was also creation of a N200 billion healthcare intervention fund for pharmaceutical companies and healthcare practitioners to expand and strengthen the capacity of our healthcare institutions, mobilization of key stakeholders in the Nigerian economy, under the Private Sector Coalition Against COVID-19 (CACOVID) team that raised N39.65 billion to tackle the scourge”.
He added that these initiatives helped to spur and support the recovery of the economy and re-align general macroeconomic conditions.
“Owing to these policy actions, Nigeria exited the recession in the 4th quarter of 2020 with a growth rate of 0.11 percent, which improved to 0.51 percent in 2021q1. Supported by accommodative measures, growth continued to strengthen in the second quarter of and third quarter of 2021 with robust growth of 5.01 percent and 4.03 percent, respectively. This rebound was fundamentally driven by non-oil activities. Furthermore, inflation moderated for seven consecutive months, from 18.17 percent in March 2021 to 15.99 percent in October 2021. Our external reserves rose to over $41.5 billion in October 2021, supported by demand management measures, the Eurobond inflow of $4 billion and the IMF’s SDR.
