Following the Central Bank of Nigeria (CBN) stimulus measures to cushion the impact of Coronavirus (Covid-19) pandemic on the Nigerian economy, stakeholders have commended the apex bank for the directives for Micro, small and medium enterprises (MSMEs).

The CBN in an emergency meeting, announced six initial policy responses, to combat the impact of the Covid-19 pandemic on the Nigerian economy, the measures include, extension of moratorium on loans, interest rate reduction, creation of a N50 billion fund, credit support for healthcare sector, regulatory forbearance and strengthening of the loan-to-deposit rate policy.

Speaking on this development, the director-general of Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf said that the N50 billion stimulus response by the CBN is commendable and step in the right direction, saying that it would have some measure of positive enterprise level impact on businesses that can access the facility.

He added that it will impact their liquidity and operating cost and also has a symbolic significance which we must applaud.

He however, said that like in most economic challenges, monetary intervention can only fix a fraction of the problem, adding that there are fundamental macro-economic issues that investors still have to contend with in the current circumstances.  According to Yusuf, these are issues around the implications of the coronavirus pandemic for crude oil price, exchange rate depreciation, depletion of foreign reserves, inflationary pressures, stock market slump and general investors sentiments.

“These are critical drivers of investment decisions and unless the external sector normalises, there is very little domestic policy responses can do to fix these disruptions, especially in the light of the vulnerabilities of the Nigerian economy.

“The robustness of our public health response and preparedness is also critical for confidence building.  We can only pray that Nigeria’s capacity in this regard would not be tested.  The adequacy of our preventive measures do not seem satisfactory.”

Management and Corporate Governance expert, Dr Akin Ajayi said that “Any relief measure and intervention fund directed at MSMEs is always welcomed as they are the backbone of the real economy. If the N50 billion is judiciously disbursed and adequately monitored,  it will go some way in stimulating the economy, creation of wealth and driving up the employment figures.”

He stated that same goes for the slash in interest rates of the government intervention loans such as the Anchor Borrower Scheme, among others, saying with  businesses fast losing revenues or income that they had hitherto budgeted or planned towards owing to the Covid-19 pandemic.

According to Ajayi, this impacts negatively on their abilities to repay their loans with the banks which could lead to businesses shutting down as well as a spike in the unemployment figures.

“In order to keep the economy going and ensuring businesses are afloat, the CBN slashed interest rates by 400 basis point for all government intervention loans. This will ease the repayment pressures on the MSMEs as the drop in interest repayment will now cushion the effects of loss of revenues being experienced by these firms.”

He added that monitoring banks are expected to reschedule the loans and tenure to reflect the new directives in line with growing realities, saying that these are commendable moves by the CBN as the measures are all geared towards insulating our fragile economy as much as possible from slipping into another recession.

He added that these measures will stimulate MSMEs and aid in their competitiveness in the market.

Also, Investment Professional and Business Administration Coach, Dr Timi Olubiyi said that this is a welcome development from the government and the policy makers in the country, a proactive step in the right direction for the MSMEs.

He pointed out that “With the growing concerns of the coronavirus pandemic and the attendant negative economic impact especially in the revenue and projected income estimates of MSMEs, this measure is a safe palliative.

“It will give the MSMEs succour because they are already going through difficult times dealing with loan obligations and business operations.

“Most raw materials are from China and other countries where the pandemic is more pronounced couple with our MSMEs being import dependent. Consequently business performance and continuity would be hinder and there will be pressure due to current development.”

He noted that the cut in the intervention funds interest rate to five per cent from nine per cent and the additional N50 billion will mitigate the negative impact of the pandemic in the short run.