The Central Bank of Nigeria (CBN) has announced N5 billion as the maximum loan amount for private companies in its newly introduced initiative, called ‘The 100 for 100 PPP – Policy on Production and Productivity.
The CBN disclosed this in its guidelines for the implementation of the initiative published on its website.
Part of the guidelines reads: “Loan amount shall be a maximum of N5 billion per obligor. Any amount above N5 billion shall require the special approval of CBN’s management.”
The guideline also added that the interest rate under the intervention would be at not more than five percent per annum (all-inclusive) up to February 28, 2022, adding that interest on the facility would revert to nine percent p.a. (all-inclusive) effective from March 1, 2022.
“Quarterly, starting from November 1, 2021, the initiative shall select 100 private sector companies with projects that have potential to significantly increase domestic production and productivity, reduce imports, increase non-oil exports, and overall improvements in the foreign exchange generating capacity of the Nigerian economy.
“The initiative, which shall be bank-led, will be rolled over every 100 days (that is, quarterly) with a new set of companies selected for financing under the initiative,” CBN said.
On the initiative, CBN explained that it would be implemented in collaboration with relevant stakeholders, with a focus on micro and macroeconomic impacts, in terms of contribution to GDP and exports, sustainable jobs created, local content development, production output, and capacity utilisation and integration into the global value chain.
“The broad objective of the initiative is to reverse the nation’s over-reliance on imports, by creating an ecosystem that targets and supports the right projects with the potential to transform and catalyse the productive base of the economy.”
Highlighting the specific objectives of the initiative, the CBN said, it was designed as a catalyse for import substitution of targeted commodities, increase local production, productivity, non-oil exports, and also improve the foreign exchange-earning capacity of the economy.
The central bank said the activities could be in manufacturing, agriculture and agro-processing, extractive industries, petrochemicals and renewable energy, healthcare, and pharmaceuticals.
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