[Nigeria] CBN Assures Agric, Manufacturing Sectors of Single Digit Interest

The Central Bank of Nigeria, CBN, has assured that the agricultural and  manufacturing sectors will enjoy single digit interest rates as the apex bank intends to accelerate lending of a reserved special intervention fund earmarked for the sectors.

It has earmarked N235 billion and N750 billion as intervention funds for the manufacturing and agricultural sectors respectively, which it describes as pivotal in the resuscitation of the nation’s ailing economy.

The CBN Director, Banking Supervision, Mrs. Tokunbo Martins, revealed this in Abuja on Tuesday, August 16, while briefing the media on the outcome of 328 sessions of Bankers’ Committee meeting.

Martins also revealed the joint decision by CBN and Bankers’ Committee to increase limit of banks’ forex sale to Bureaux De Change (BDCs) to $50,000 from $30,000 it was two weeks ago.

Martins, accompanied at the briefing by Group Managing Director of United Bank for Africa (UBA), Kennedy Uzoka, Zenith Bank Group Managing Director, Peter Amangbo, and Hassan Usman of Jaiz Bank Plc, said the decision to utilise CBN’s special reserved funds for lending to agricultural and manufacturing sectors was taken to hurriedly revamp the economy.

“The issues we discussed are about the economy. The economy is always high up in our discussion. Issue came up about lending and how lending can be done to support economic conditions as we have it today with low single interest rate. As you may be aware, some time ago CBN took some cash reserves – special intervention fund – and this has been with CBN for some time.”

“There was discussion on it and the decision was that those funds will be disbursed to support primary agriculture projects and projects that are in core manufacturing. Such projects must be ones that support import substitution; projects that will help preserve foreign exchange so that those things that are being imported before can be manufactured here.”

“The funds will only be released to these kinds of projects and there will be some ease in the industry. Important projects that will get financing at single digit lending rate,” she stated.

Also commenting on the plans to boost forex supply to BDCs, the Group Managing Director of UBA, Kennedy Uzoka, said the decision stems from the feedback from the market.

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