By Elizabeth Chukwuma
When Isaac Okoroafor, a Director, and the Central Bank of Nigerian,CBN, Spokesperson disclosed last April of plans by the apex to start the weekly sales of the Foreign Exchange, to the Money Deposit Banks nobody took him serious because of the Wuhan Town in Hebei Province of the Asian country of China emerged Coronavirus, popular, COVID 19.
True to its words, the apex bank has kept to its promise as it had resumed the provision and sales of Foreign exchange to all Money Deposit Banks, MDBs, for onward sales to Small and Medium Scale Enterprises, SMEs, wishing to make essential imports of raw materials and chemicals needed to revamp economic activities across the country as well as parents wishing to pay school fees abroad.
Okoroafor, had said that the apex bank would make a weekly provision of $100 million and above to the MDBs for sales to interested applicants. It was said to have also completed arrangements to resume Forex sales to the Bureau De Change, BDC, segment of the market to accommodate business tr and personal travels as soon as International flights resumes.
Recall that last April, the International Monetary Fund, IMF, a multi-lateral Financial Institution, had approved a $3.4 billion loan facility for the Nigerian government to cushion the effect of the drop in the price of Crude Oil, in the International market in order to Fund the 2020 budget and support the Small and Medium Scales Enterprises, SMEs, which are at the brink of Collapse because of the COVID 19.
In a related development, the bank was said to have to have also kept to its promise of providing N100 billion Credit support to the nation’s health sector as part of the measures to address the impact of the COVID 19, on the nation’s health sector between 2020 and 2030.
Godwin Emiefiele, the governor of the CBN, had said that the objective of the health care intervention Fund , include , reduction of health tourism abroad to conserve foreign exchange for the country, providing low cost finance for health infrastructure development that would lead to development of a world class access healthcare facility in the country, improving affordable Credit to indigenous Pharmaceutical companies to expand their operations and comply with the World Health Organisation, a United Nations Health agency,Good Manufacturing Practices, GMP .
The facility, according to medical experts, will go a long way in supporting the companies in the provision of shared services through a one-stop healthcare solution and reducing the cost of healthcare delivery in the country. the CBN , may have been working according to President Muhammadu Buhari’s broad plan to tackle the country’s weak health system.
Going by the broad plan of the katsina state born Nigerian President to strengthen the nation’s weak health system, was the establishment of Standard Laboratories , Intensive Health care Units, Isolation and Treatment centers in all states of the Federation that will be Calibrated for future emergencies.
Already, the apex bank has made it clear that the eligible applicants that would benefit from the intervention Fund are Pharmaceutical Companies producing drugs and medical equipment, healthcare Product Manufacturers and healthcare service providers/medical facilities,Hospitals/Clinics, Diagnostic centers and Laboratories, Fitness and Wellness centers, Rehabilitation centers, Analysis centers and blood banks among others.
This is in addition to the distribution and logistics services and other human health care service providers as may be determined by the bank ,from time to time. The bank was said to have made it clear to the MDs and Development banks that the eligible activities to be supported by the intervention Fund include manufacturing of pharmaceutical drugs and medical equipment , companies expansion/upgrade of basic special health care facilities and medical /pharmaceutical supplies which is in line with the government health policy.
Others are medical, pharmaceutical research and development , distribution of medical and pharmaceutical drugs and supplies, technology and other health care value chain as may be prescribed by the CBN. The apex bank was said to have made it clear that the term loan had a minimum of N2 billion per every successful applicant , but the interest rate would not be more than 5 % per annum until February 28, 2021.
Given that the intervention Fund would be used to provide Credit to indigenous Pharmaceutical Companies and other health care chain players intending to build and expand Capacity, the CBN, has given a matching order to the Money Deposit Banks, MDBs, to ensure that the Forex bought from the banks are sold only to Parents wishing to pay school fees, SMEs, in order to make essential raw material and Chemical imports for their factories and Pharmaceutical Companies. This is because the bank has made N100 billion available to support the nation’s health sector
Ifie Sekibo, Managing Director, Heritage Bank , has said that the bank will serve as a conduit which will assess and channel the profiles of interested applicants to the apex bank using its Platforms to create awareness for the scheme. Sekibo reportedly said that for firms in the health care sector and Corporate Organisations interested for the loan facility must submit its application to a Participating Financial Institution , PFI, whichh must either be MDB or a Development Financial Institution of its choice with a workable business plan.
The MDs and the Development Banks, The Magazine was informed , according to the CBN, must not only receive the applications from interested Corporate Organisation or parents wishing to pay schools abroad but must review the applications submitted by its Customers, undertake due diligence based on business considerations and bear the Credit risk.
The bank , was said to have also insisted that the MDs must issue ‘’offer letters and forward qualified applications of Customers to it in order to facilitate the disbursement of the Funds to the successful applicants and be able to monitor their project as well as recover the loans from the beneficiaries and maintain adequate records of all the beneficiaries facilities
The Banks also requires, the MDBs and the Development Banks to register all moveable assets of the benefitting Companies with the National Collateral Registry and equally forward periodic returns in the prescribed format on the scheme to it, urging the banks to ensure they ’’ Comply with the guidelines and carry out other duties that , may prescribed by it.
This is bad news for SMEs that may want to buy the Forex on the official exchange rate or the Pharmaceutical Companies that may the get the N2 billion loan facility without using it for the purpose for the purse in which it was meant for as was the case in the past.