March 16, 2020 / 2:43 PM / 20 days ago

UPDATE 1-Nigeria's central bank to create fund to fight coronavirus

(Adds details, quotes)

By Camillus Eboh

ABUJA, March 16 (Reuters) - Nigeria’s central bank will create a 50 billion naira ($163 million) fund to combat the impact of the coronavirus pandemic on Africa’s biggest economy and allow banks to give their customers more time to repay loans, its governor said on Monday.

Godwin Emefiele announced the support package at a press conference in the capital, Abuja. Africa’s top oil producer, which has had two confirmed cases of the virus, has been hit hard by low crude prices caused by lower demand from China and a price war between Saudi Arabia and Russia.

He said credit support for the health sector aimed to meet “potential increase in demand”. It was intended for loans to pharmaceutical companies planning to expand or establish drug manufacturing plants in Nigeria and to health companies that wanted to build hospitals and clinics.

Other measures announced include cutting interest rates on some central bank loans to 5% per annum, down from 9%, for one year.

“The CBN (Central Bank of Nigeria) stands ready to provide liquidity back stops as and when required in view of its role as banker to the federal government and lender of last resort,” said Emefiele. The bank on Thursday reacted to speculation about a possible devaluation of the naira by saying “market fundamentals” did not support such a move.

The finance ministry last week said Nigeria would cut the size of its record 10.6 trillion naira ($34.6 billion) budget for 2020 due to low oil prices. The spending plan was calculated assuming a price of $57 per barrel, but Brent crude has hovered around $33 a barrel in recent days. ($1 = 306.0000 naira) (Reporting by Camillus Eboh; Additional reporting by Abraham Achirga; Writing by Alexis Akwagyiram; Editing by Chijioke Ohuocha and Giles Elgood)

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