LCCI chief praises CBN’s N3.5tr grant to firms

Okwy Iroegbu-Chikezie

THE Lagos Chamber of Commerce & Industry (LCCI) has commended the Central Bank of Nigeria (CBN) and the Bankers’ Committee for pledging  N3.5 trillion as stimulus package for the economy hit by the Covid-19 pandemic.

LCCI Director-General Dr. Muda Yusuf said the cumulative N3.5 trillion stimulus and other policy measures announced by the CBN to cushion the effects of the coronavirus outbreak on the  economy were laudable.

CBN Governor Godwin Emefiele explained that the  cash would grant funding facilities in naira and foreign exchange (forex) to enable pharmaceutical firms procure raw materials and equipment to boost local drug production in the country.

He said CBN took the decision to support the pharmaceutical firms because the  pandemic was of grave public health challenge. He listed the benefiting firms as Emzor, Fidson, GSK, May & Baker and Unique Pharms.

Others are Swiss Pharma, Neimeth, Sagar, Orange Drugs and Dana Pharma.

Commending the intervention, Yusuf said it was a step in the right direction.  According to him, it does not only have a symbolic significance, but could impact their liquidity and operating cost.

He lauded other policy measures by the CBN, including the one year moratorium on CBN intervention facilities; interest rate reduction on intervention funds; creation of N50 billion credit facilities for SMEs; restricting and refinancing opportunities for facilities.

Others are activation of N1.5 trillion InfraCo project for building infrastructure; N100 billion facilities for pharmaceutical firms and healthcare practitioners; and N1 trillion loans to boost local manufacturing and production across sectors.

The LCCI chief stressed that the health sector component of the fund was, particularly laudable, because the challenge is essentially a public health crisis.

Read Also: LCCI urges total approach to power problems

He advised that effective public health management response was perhaps, the most critical at this time.

He also noted that it would have been nice to extend the support to the public health management systems at the federal and state levels in a more holistic manner, as this is the paramount challenge at this time.

Yusuf argued that, like in most challenges, monetary intervention could only fix a fraction of the problem, noting  that this is essentially a supply side of the intervention.

He called the attention of the CBN to the fundamental macro-economic issues that investors must contend with in the circumstance.

Yusuf listed the issues to include exchange rate depreciation, depletion of foreign reserves, inflationary pressures, stock market slump and general investors’ sentiments.

Pointing out that these are critical drivers of investment decisions and investors’ confidence, he said unless the external sector normalises, there was little domestic policy responses could do to fix these disruptions, especially in the light of the vulnerabilities of the  economy.

The LCCI boss advised that a reversal of the slide in the economy was critical to strengthen its demand side.

He said: “A supply side stimulus needs a complementary demand side fortification otherwise there would be the unintended outcomes of unsold inventories build up.’’