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Nigeria’s Banks Resolve To Rule Out Profit Motive In Favour Of Coronavirus Battle

Nigeria’s Banks have resolved at a bankers’ Committee meeting today, March 21, to rule out profit motive as the world stands in unison to battle Coronavirus.
A communique emanating from the meeting, copy of which was made available to Greengage Reporters, the Bankers’Committee, comprising mainly of Chief Executivev Officers of Nigerian banks, said that the meeting dealt with the impact of COVID-19 on the banking system in particular and the economy in general.
“The Committee discussed the significant health and economic crisis caused by the novel Corona virus (COVID-19) which has resulted in escalating worldwide infections, deaths, disruptions in global supply chains, travel restrictions and turmoil in the international financial markets. It further noted the policy responses across governments and central banks around the world including the CBN
“It was  resolved  that  the  CBN  and  banking industry will collaborate at this critical moment – with one coherent strategy to provide confidence to  the  customers, counter parties, the public and most importantly, put Nigeria first.
The industry has learnt lessons from previous crisis including the 2008 global financial crisis and the oil price slump of 2016, which will be applicable and position the industry to better deal with this crisis.
“The industry resolved that profit will not be the primary motive at this time. Rather, preserving confidence, financial stability and support for the economy will be the overriding objectives.
“Engagements will be held with correspondent banks, trade  creditors, trading partners regarding existing LC and trade commitments.  The  industry is committed to resolving    these commitments in a comprehensive and orderly way. There will be transparent and open communication with all counterparties
“In view of the significant disruption of the global supply chains, the bankers committee advises Nigerians and companies to begin prioritizing their import needs and focus more on sourcing raw materials and inputs locally.
“The bankers committee noted the success of the CBN’s 43 items policy and encouraged it to strengthen it and other measures targeted at export  promotion  and/or import substitution to position Nigeria as a key global producer and build a self-sufficient economy.
“The Committee further discussed the financial system’s implementation and operationalization of the policy measures earlier announced by the CBN including:
Additional moratorium of 1 year on CBN intervention facilities
Interest rate reduction on intervention facilities from 9% to 5%
Creation of N50 billion targeted credit facility for affected households & SMEs.
Granting Regulatory forbearance to banks to restructure terms of facilities in affected sectors, Strengthening the LOR policy, which is encouraging significant extra lending from banks.
Improving FX supply to the CBN by directing all oil companies (international and domestic) and all related companies (oil service) to sell FX to CBN and no longer NNPC.
Activation of the N1.5 trillion lnfraCo Project for building critical infrastructure;
N1.0 Trillion to healthcare loans to pharmaceutical companies, healthcare  practitioners intending to expand/build capacity;
N1 trillion in loans to boost local manufacturing and production across critical sectors:
“The combination of these measures amounts to over N3.5 trillion in stimulus to the Nigerian economy to ameliorate the pains arising from the COVID-19 health.
“Given that this crisis is first and foremost a public health crisis, we are paying particular attention to our health industry. As aforementioned, global supply chains have been disrupted including dominant drug supply channels from China and India. In fact, many countries have or are planning to ban export of drugs and medical supplies from their countries. Clearly, we have no choice but to produce these items locally.
“Thus the Committee has identified a few key local pharmaceutical companies who shall be granted Naira and FX funding facilities to support procurement of raw materials and equipment required to exponentially increase local drug production in Nigeria. These include but are not limited to Emzor, Fidson, GSK, May & Baker, Unique Pharma, Swiss Pharma,  Neimeth,        Sagar,  Orange Drugs, Dana Pharma, etc.”

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