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CBN Intervention Funds yet to achieve desired impact – Expert

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The Chief Economist of Coronation Merchant Bank, Chinwe Egwim, has called attention to the need to strengthen the disbursement and accountability framework of the various CBN Intervention Funds, noting that the interventions are yet to achieve the desired impact.

The economist made the assertion during the recently concluded Nairametrics Economic Roundtable held on the 7th of August, 2021 with the theme “How to get out of the Economic Crisis.”

Her reaction was in response to a recent report by the World Bank which alluded to the fact that various intervention funds instituted by the Central Bank of Nigeria (CBN) were pivotal in helping Nigeria overturn the hard biting impact of the COVID-19 pandemic and return to economic growth.

Lending credence to the World Bank report, Nairametrics recently reported that some Nigeria-based companies declared massive profits on the back of CBN Intervention loans.

Reacting to the report, Egwim said, ”Interventions are essential, I wouldn’t say that should stop but I do share the same view that the impact is not really aligned with the progression of growth.

“I can give an example, agriculture. Before the pandemic, that sector enjoyed a lot of interventions and stock injections, but then when you look at the output numbers released by the NBS, I can’t remember the last time I saw it at 5% YoY.”

She, however, agreed that interventions needed to continue to support the economy and support growth.

To address this lacuna, experts present at the webinar brainstormed and shared ideas on how the Nigerian economy can overcome its challenges. To access the video of the webinar, click HERE.

What you should know about the CBN Intervention Funds

Recall that in the wake of the COVID-19 Pandemic, the Central Bank of Nigeria being the apex monetary authority rolled out massive developmental interventions that cut across key sectors such as manufacturing, agriculture and SMEs. Some of these interventions are Real Sector Support Facility, SME Credit Guarantee Scheme, Agri-business/Small and Medium Enterprises Investment Scheme (AGSMEIS), Nigeria Youth Investment Fund (NYIF), among others.

Additionally, the CBN also extended its forbearance of intervention loans for companies by retaining an interest rate of 5% for another one year as against the 9% previously charged.

As of February 2021, the apex bank noted that it had disbursed a total of N1.487 trillion to its various agriculture-centred initiatives. Of this lump sum, N686.59 billion was disbursed under the Commercial Agricultural Credit Scheme (CACS), and N601.75 billion under the Anchor Borrowers Programme (ABP) to 3,038,649 farmers to support food supply and dampen inflationary pressures.

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