CBN Reverses Interest Rates on Intervention Loans to 9%

The Central Bank of Nigeria (CBN) says it has reversed the reduction of five per cent interest rate paid on its interventions facilities to nine per cent yearly, starting from September 1, 2022.

The bank had, at the peak of the COVID-19 pandemic, reduced interest rate on its interventions facilities from nine per cent to five per cent.

However, in yesterday’s circular with reference: FPR/DIR/PUB/CIR/001/058, by the Director of Financial Policy and regulation Department, Mr. Chibuzo Efobi, the apex bank stated that it had returned the rate to its original nine per cent.

The circular entitled: “Adjustment of interest rate on all Central Bank of Nigeria Interventions,” was addressed to banks and Other Financial Institutions.

According to the circular, “Further to our circular dated March 1, 2022 (Ref: FPR/DIR/PUB/CIR/001/040) extending the period of interest rate reduction on all intervention facilities from nine per cent to five percent per annum (as part of measures to mitigate the negative impact of COVID-19 pandemic on the economy), the Central Bank of Nigeria hereby reverts the interest rate on all its intervention facilities to nine per cent per annum.

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“The reversed rate shall be implemented as follows: all intervention facilities granted effective July 20, 2022 shall be at nine per cent per annum; all existing intervention facilities granted prior to July 20, shall be at nine per cent per annum.

CBN data showed that the apex bank disbursed N75.9 billion loan to farmers between last November and December, under the Anchor Borrowers’ Programme (ABP).

The fund was to support the cultivation of over 383,000 hectares of maize, rice and wheat during the 2022 dry season, bringing the total disbursements under the Programme to N927.94 billion to over 4.5 million smallholder farmers cultivating 21 commodities across the country.

In a CBN report, the apex bank said excess output aggregated from the financed farmers would be released to the Nigeria Commodity Exchange (NCX) to help moderate the prices of food in the market.

The bank also released N1.76 billion to finance two large-scale agricultural projects under the Commercial Agriculture Credit Scheme (CACS).

In addition, the apex bank disbursed N151.23 billion under the Real Sector Facility to 15 additional projects in agriculture, manufacturing, mining, and services.