Another Lockdown Will Reverse The Gains Made Since The Economy Was Reopened – CBN

The Central Bank of Nigeria, CBN has come out to say that the Federal Government (FG) should avoid another lockdown amid the pandemic.

This was recently revealed in a statement by the CBN Governor, Godwin Emefiele, at the end of the apex bank’s Monetary Policy Committee (MPC) first meeting of the year in Abuja.

According to him, another total lockdown in Nigeria will be very catastrophic to Nigerians and the economy, so it is best for FG to look for another way.

He added that the government will not want another complete lockdown to reverse the current gains of the stimulus earlier provided in 2020, so another solution is needed amid the outbreak.

His words, “While expressing understanding of the public health dilemma of the recent spike in infections (COVID-19), MPC encouraged the government not to consider a wholesome lockdown of the Nigerian economy so as not to reverse the current gains of the stimulus earlier provided in 2020.”

“As long as we see that there is second wave of COVID-19 even in Nigeria, while we are trying to convince government not to adopt the wholesome lockdown because that will be catastrophic for everybody and the economy, we would extend by 12 months again interest rate of five percent for CBN intervention funds.”

“It will result in losses for us particularly if we see yields going up but we think these should be also CBN contributions to ensure that interest rate particularly for our intervention funds which are targeted to either households, or SMEs, Agric, Health sector, pharmaceuticals, that will increase manufacturing output, we would continue to support it, we would continue to do so”.

“The MPC was of the view, that whereas there may be wisdom in loosening, given that the impact of the global Covid-19 pandemic has resulted in constrained activities, disruption to supply chain and suppress aggregate demand, an accommodative stance may be required to stimulate credit expansion and boost recovery in the short term.”

“The Committee was also of the view that an expansionary policy would enable the monetary authorities to convince the financial institutions to reduce loan pricing and defer interest and principal repayments to critically affected obligors in a sustainable manner.”