Understanding Federal Government COVID-19 Interventions
The COVID-19 pandemic is a global health emergency. The health and economic implications are already significantly felt in nearly all countries. It is estimated that the impact of COVID-19 on the global world of work will be overwhelming. Already, full or partial lockdown measures are affecting about 2.7 billion workers. Out of the are at least 2 billion workers in the informal sector who are at the verge of falling into un- and underemployment. As much the health systems of many countries are being stretched to the limits, poverty is rising owing to the glaring economic consequences of the crisis as well as current severe disruption of economic activities.
In the sections that follow, we shall provide a brief overview of the intervention measures of the Federal Government of Nigeria to help cushion the effect of the COVID-19 pandemic.
- Adjusts to the rules for Insurance Operations: The National Insurance Commission says is providing regulatory forbearance to insurance companies to ensure availability of insurance services and protection of policyholders during the COVID-19 movement restriction.
- New Moratorium on Mortgage Obligations of Nigerians: This is targeted at individuals that have existing Mortgages under the National Housing Fund.
- Financial Services to Continue throughout COVID-19 Lockdown: The Minister of Finance, Budget and Planning and the Governor of the Central Bank of Nigeria obtained Presidential approval to permit critical financial services to function during this period. Consequently, relevant security agencies have been requested to grant passage to critical staff of these institutions to enable essential and strategic financial transactions to go uninterrupted during the period of the lockdown.
- CBN Issue Guidelines for N100bn Pharmaceutical Fund: CBN introduced a N100 billion credit support intervention for the healthcare industry to strengthen the sector’s capacity to meet the potential increase in demand for healthcare products and services.
- Campaign to raise N1bn to Support Health Workers: companies and individuals have offered support in various forms as a means of showing their support towards the fight against coronavirus such as cash donation, material support as well as the provision of infrastructure but none is speaking to the need of the health workers. This initiative seeks to do just that. Tagged Health Workers Fund, this initiative is sourcing from the public a sum of One Billion Naira (N1, 000, 000, 000).
- Reduced Interest rate: Interest rate for all CBN Intervention facilities has been reduced from 9% to 5% and the monetary value has been retained at 13.5%. The cash reserve ratio (CRR) and Liquidity ratio remain unchanged at 27.5% to 30% respectively Interest rates on all applicable CBN intervention facilities are hereby reduced from 9 to 5 per cent per annum for I year effective March l, 2020.
- CBN Loan and Intervention Funds: The CBN has embarked on N1 trillions in loans to boost local manufacturing and production in critical sectors (e.g. Pharmaceuticals), 50 Billion credit facility for affected households and SME’s. The CBN hereby establishes a facility through the NIRSAL Microfinance Bank for households and small- and medium-sized enterprises (SMEs) that have been particularly hard hit by Covid-19, including but not limited to hoteliers, airline service providers, health care merchants, etc.
- Credit Relief for all CBN Facilities: All CBN intervention facilities are hereby granted a further moratorium of one year on all principal repayments, effective March l, 2020. This means that any intervention loan currently under moratorium is hereby granted an additional period of one year. Accordingly, participating financial institutions are hereby directed to provide new amortization schedules for all beneficiaries. The CBN has included an additional one year moratorium for all CBN intervention Facilities.
- 50% income tax rebate on the total amount due on a pay as you earn(PAYE) tax: This is targeted on Nigerians who retain all their employees from March 1, 2020, to 31 December 2020 and is aimed at protecting employees from loss of jobs as a result of the Pandemic.
- Waiver of Import duties: The Federal Government has suspended import duties on Medical equipment, Medicines and personnel protective equipment required for the treatment and management of Covid-19 for three months, effective 1 March 2020.
- Credit Support for Healthcare Industry: the Federal Government of Nigeria through the CBN hereby opens for its intervention facilities, loans to pharmaceutical companies intending to expand/open their drug manufacturing plants in Nigeria, as well as to Hospital and Healthcare practitioners who intend to expand/build the Health facilities to first-class centres. This is in addition to growing the size of existing interventions to the Agricultural and Manufacturing sectors in Nigeria.
- Strengthening Of The CBN LDR Policy: Given the success of the LDR Policy in growing credit to the economy and reducing interest rates, the CBN would further support industry funding levels to maintain DMBs’ capacity to direct credit to individuals, households, and businesses. We will also consider additional incentives to encourage the extension of longer-tenured credit facilities. DMBs are encouraged to continue to build capital buffers to improve the resilience of the sector.
 ILO (2018). “Women and Men in the informal economy: A statistical picture “