The Central Bank of Nigeria is beginning to scale down it’s economic intervention programmes in various sectors of the economy as a means of reducing the quantum of money in circulation.
The move is part of measures aimed at ensuring that the over N9trn which the bank had given out as loans to stimulate various sectors of the economy are recovered from beneficiaries.
Already, about N3.7trn out of the N9.3trn injected into the economy by the CBN under it’s various intervention programmes have so far been recovered.
The CBN Director, Development Finance department, Mr. Yila Yusuf confirmed the apex bank’s move on Wednesday in Abuja.
He said that the CBN would scale down it’s intervention programme to just two critical sectors of the economy.
The sectors are the Micro, Small and Medium Enterprises and the power sector.
Yusuf said, “We have started recovery program. Every single loan must be recovered. It’s a revolving loans meant to be paid back and not a grant.
“Yes, we are slowing down on intervention. We have already started before Monetary Policy Committee announced to taper.
“While we close gate on every other intervention, we will be doing only interventions that are very critical- MSMEs and electricity. They’re statutory .
“We will keep interventions on SMEs and then support the electricity sector. They are very critical. So we will be providing liquidity. Those are the ones that were deemed critical.
“As of yesterday, N3.7trn has been repaid. Most of them are still on moratorium. Manufacturing firms form the largest part of our portfolio.
“We ‘ve given out N1trn for Anchor Borrowers Programme of which close to N400bn has come back. Every single person who has taken facility is going to pay back.. We have your BVN, we are going to activate Global Standing Instruction (GSI) policy. We will continue to pull accounts in whichever banks they have accounts.”
He explained further that that N5trn loan which the CBN used in intervening in the manufacturing sector is a long tenure facility which is not yet due for repayment.
The CBN Director also stated that the apex bank has begun recovery of loan facilities granted to states government.
According to him, about N150m is being debited at source from the monthly Federation Account Allocation Committee of indebted states whose facilities are due for repayment.
“We have started recovering loans from the states government. We have been doing a loan workout with them. If a state government has taken N1bn and has been in a six months default, we are going to be debiting them N150m.
“We have started that program. We are working with EFCC. The CBN Governor has approved collaboration with the EFCC on loan recoveries.”