.NECA hails interest rate reduction
By Dike Onwuamaeze and Chris Uba
The Central Bank of Nigeria (CBN) has extended the deadline for the submission of the 2019 audited financial statements by Other Financial Institutions (OFIs) under its regulation, from April 30th, to July 31, 2020.
The Director, OFIs Supervision Department, CBN, Nkiru Asiegbu, who disclosed this in a letter addressed to the OFIs, some of which include Finance Houses, microfinance banks, Bureau De Change, explained that the decision to extend the deadline was due to the lockdown in most cities as result of the COVID-19.
The CBN explained: “Pursuant to the provisions of Section 27 (1)(a) of BOFIA, all banks and OFIs are required to forward the audited financial statements of each financial year to the CBN for approval before the end of the fourth month following the year to which they relate.
“Accordingly, the 2019 audited financial statements should have reached the CBN on or before April 30th, 2020. However, we have observed that the lockdown of most cities in the country due to the coronavirus pandemic has restricted the engagement of external auditors and the daily operations of all OFIs across the country.
“Therefore, the deadline for submission has been extended by three months. For the avoidance of doubt, all OFIs are required to submit the 2019 audited financial statements on or before July 31, 2020. Please note that the CBN will monitor compliance with the extended date and defaulters would be sanctioned accordingly.”
Meanwhile, the Nigeria Employers’ Consultative Association (NECA) has applauded the Monetary Policy Committee (MPC) over its decision to reduce the Monetary Policy Rate (MPR) from 13.5 per cent to 12.5 per cent.
In a statement issued by the Director-General of NECA, Dr. Timothy Olawale, the association said the development signalled a pro-growth response, that could lead to reduction in the cost of credit, increase investment and impact positively on output growth, in order to address the current global challenges.
“We applaud the current decision of the MPC, which aligned perfectly with the association’s earlier recommendation.
“It is our belief, that the committee understands that high interest rate is a risk to the economy at this time.
“We, therefore, called for synergy between the fiscal and monetary policy in order to move the economy, which is already in bleeding stage.
“Development of more robust and coordinated stimulus packages for the sectors that are worst hit by the pandemic, and opening up the non-oil economy for more productivity, to reduce the shock expected from falling global oil prices, would be a welcome development in pulling the economy from nose-diving into recession.”
NECA noted, however, that the MPC held other key parameters unchanged as the Cash Reserve Requirement (CRR) was left at 22.7 per cent while the liquidity ratio was kept at 30 per cent. The committee also retained the asymmetric corridor around the MPR at +200/-500bps.
“With the negative effects of COVID-19, twin challenge of the global oil prices, and over-exposure of our economy to external shocks, this decision, is a welcome development that the monetary authority by easing its policy in order to protect the economy,” the association said.