CBN Gets FG Approval For Infrastructure Development Company; Disburses Over 290BN In Covid19 Relief Funds
The Federal Government of Nigeria has on Monday, approved the setting up of the Infrastructure Development Company led by the Central Bank of Nigeria (CBN).
The company launched by CBN, is designed to leverage local and international funds for rebuilding of critical infrastructure across the country.
“The sum of N15 trillion is projected over five years for the initial run,” CBN Governor Godwin Emefiele disclosed yesterday during a media briefing to mark the end of July meeting of the Monetary Policy Committee (MPC).
Emefiele further disclosed on Monday that CBN has disbursed N295.695bn out of the over N1.15trillion bookmarked as COVID-19 intervention fund to manufacturers, health care sector, the SMEs and the households.
Speaking during the July 2020 Monetary Policy Committee’s (MPC’s) meeting virtual press briefing, the CBN Governor gave the breakdown of the disbursements, showing that N49.195bn of the N50 billion Household and SME facility had been disbursed to over 92,000 beneficiaries, N152.9bn to the manufacturing sector and N93.6bn to the healthcare sector, amongst many other sector-specific facilities.
He said the committee is hopeful that upon further drawdown of these intervention facilities, the much needed reset and rebound of the Nigerian economy will become a reality.
The Governor of the Central Bank of Nigeria further revealed that the Apex bank retained the country’s benchmark interest rate or Monetary Policy Rate (MPR) at 12.5 per cent.
Emefiele also stated that the bank’s interventions in the economy were yielding positive results.
According to Emefiele, the retention of the MPR at 12.5 per cent was the decision of the Monetary Policy Committee at their July 20, 2020 meeting.
The CBN boss explained that the Committee also noted that increasing MPR at the current stage of the economy would be counter-intuitive and would result in upward pressure on market rates and cost of production.
In his words: “In view of the foregoing, the committee decided by a majority vote to retain the Monetary Policy Rate at 12.5 per cent and to hold all other policy parameters constant.
“The committee decided by a vote of eight members to hold and two members voted to reduce MPR. All members voted to retain all other policy parameters.
“In summary, the MPC voted to retain the MPR at 12.5 per cent; retain the asymmetric corridor of +200/-500 basis points around the MPR; retain the CRR (Cash Reserve Ratio) at 27.5 per cent; and retain the Liquidity Ratio at 30 per cent.”
According to him, further cut in MPR might not necessarily lead to a corresponding decrease in market interest rate, considering the current economic challenges.
Emefiele said the committee was mindful of the cut in policy rate at the last MPC meeting and the need to allow time for the transmission effect to permeate the economy.