The Central Bank of Nigeria (CBN) has suspended foreign exchange sales to Bureau De Change (BDC) operators until further notice.
The CBN said this in a March 25, 2020 letter to the president of Association of Bureau De Change Operators of Nigeria (ABCON).
The BDCs had in a letter dated March 24, 2020 recommended that the CBN declare market holiday on its weekly bidding pending the re-opening of the nation’s borders and until the ravaging Covid-19 is put under check.
This followed government’s restriction of gatherings to not more than 20 persons aimed at curbing the spread of coronavirus by reducing person-to-person contact.
The letter, signed by Jibrin A.S., said the concentration of the BDC encashers at disbursement centres would pose health challenges.
The outbreak of the coronavirus has disrupted socio-economic activities not only in Nigeria but across the world. The situation is further worsened with the crash of crude oil prices in the international market with its attendant effect on economic activities.
Consequently, this has led several countries to take decisive measures to contain the spread of the outbreak with Nigeria inclusive. These measures include, among others, the total shutdown of air and land borders across the world leading to reduction in travels and demand for foreign exchange by travellers.
Part of the letter to BDCs said based on the recommendations of ABCON, “sales of foreign currency to members of ABCON are hereby suspended until further notice. Meanwhile, you may wish to inform all your members accordingly of this development. Please accept the assurance of the warmest regards of the governor, CBN”.
Aminu Gwadabe, acting president, national executive council, ABCON, said in a notice to all BDCs that the CBN has granted their request. Effective Friday (today), there would be no market days henceforth for a tentative two-week break.
“We also want to advise members to strictly comply with their regulatory obligations on their daily operation. If you are trading be cautious not to fall under the hand of security agencies. Don’t be involved in giving black market rates, street trading as doing so might create regulatory breach,” Gwadabe said.
“Please, also note that both the CBN/NFIU are tracking large movements of funds within the financial sector and the need to be cautious,” he said.
Nigeria’s currency on Thursday deprecated by 1.39 percent to close at N385.53kobo per dollar at the Investors and Exporters (I&E) forex window, data from FMDQ show. The naira weakened to 361 to the dollar on the official market, supported by the central bank.
The CBN also said on Thursday that interest rate on the health intervention facility for indigenous pharmaceutical companies and healthcare practitioners intending to build or expand their capacity would revert to 9 percent per annum (all inclusive) as from March 1, 2021.
The N100 billion credit support intervention was introduced by the CBN as part of proactive measures to cushion the impact of the coronavirus (COVID-19) pandemic on the economy.
On Thursday, the apex bank issued operational guidelines for the credit support.
The guideline, which was signed by Kevin Amugo, director, financial policy and regulation, stated that interest rate under the intervention would be at not more than 5.0 percent per annum, (all inclusive) up to February 28, 2021.
In terms of working capital, the facility requires 20 percent of the average of three years of the company’s turnover subject to a maximum of N500 million per obligor. Where the enterprise is not up to three years in operation, 20 percent of the previous year’s turnover will suffice. The term loan is put at maximum of N2 billion per obligor.
The scheme is to be funded from the Real Sector Support Facility – Differentiated Cash Reserves Requirement (RSSF-DCRR), the CBN said.
The objectives of the scheme include to reduce health tourism to conserve foreign exchange; provide long-term, low-cost finance for healthcare infrastructure development that would lead to the evolvement of world-class healthcare facilities in the country, and; improve access to affordable credit by indigenous pharmaceutical companies to expand their operations and comply with the World Health Organisation’s Good Manufacturing Practices (WHO GMP), and to support the provision of shared services through one-stop healthcare solution to enhance competition and reduce the cost of healthcare delivery in the country.
Eligible participants under the scheme include healthcare product manufacturers – pharmaceutical drugs and medical equipment; healthcare service providers/medical facilities – hospitals/clinics, diagnostic centres/laboratories, fitness and wellness centres, rehabilitation centres, dialysis centres, blood banks, etc; pharmaceutical/medical products distribution and logistics services, and other human healthcare service providers as may be determined by the CBN from time to time.
The eligible financial institutions are Deposit Money Banks (DMBs) and Development Finance Institutions (DFIs).
According to the guidelines, the collateral to be pledged by borrowers under the programme would be as may be required under the RSSF-DCRR.
The apex bank said periodic joint monitoring of activities financed under the scheme would be conducted by the PFI and the CBN.
The CBN also issued guidelines for the implementation of the N50 billion targeted credit facility for households and Small and Medium Enterprises (SMEs that have been particularly hard hit by Covid-19.
The broad objectives of the CBN’s N50 billion Targeted Credit Facility include to cushion the adverse effects of COVID-19 on households and MSMEs; support households and MSMEs whose economic activities have been significantly disrupted by the COVID-19 pandemic, stimulate credit to MSMEs to expand their productive capacity through equipment upgrade, and research and development.
HOPE MOSES-ASHIKE
