Coronavirus: Global economic recession looms
*As CBN slashes interest rate to 5%
By Udeme Clement & Joel ThankGod
If measures are not put in place urgently to tackle the Coronavirus outbreak in various countries, the world may experience global economic recession.
Financial Business News learnt that the Coronavirus pandemic is affecting export, aviation, oil/gas, financial industry, the stock market and every sector of the economy.
As such, businesses are experiencing sluggish growth worldwide, even as some countries have closed their borders, placing restrictions on various economic activities for fear of further spread of the virus.
More so, Economists and Investors around the world have expressed concerns about the rapid spread of the virus and its adverse effect on the global economy.
As part of its strategies to address the effect on the economy, the Central Bank of Nigeria, CBN, has announced a drop on interest rates for all its intervention funds from nine percent to five percent.
In the same vein, the Apex bank announced additional N50billion intervention fund for Micro, Small and Medium Enterprises, MSMEs doing business in Nigeria.
Speaking further, the CBN Governor, Godwin Emefiele, explained that the slash in interest rate becomes imperative to mitigate negative effect of the Coronavirus on enterprises in the country.
According to him, the slash in interest rate will last for one year, in order to enable affected enterprises get back on stream.
He mentioned agriculture, manufacturing, healthcare, oils and gas among other sectors to benefit from CBN Intervention fund.
His words, “From March 1, 2020, interest rates on all applicable CBN facilities are hereby reduced to 5 percent for one year. The CBN hereby establishes a facility through NIRSAL Micro-finance Bank to N50billion for households, MSMEs that have been particularly hit by Covid-19”.
He went on, “In fact, with the spread of this Coronavirus, some have expressed concerns that there may be serious economic crisis globally, that the world may go into economic recession”.