Economic Measures Taken to Reduce the Impact of COVID-19 on Citizens and Businesses in Nigeria

In response to COVID-19 crises, the Nigerian government has issued the “COVID-19 Regulation 2020” to enable the implementation of measures that can support vulnerable households and businesses. While some of the measures have already been set in motion, the COVID-19 Regulation 2020 Bill is expected to become law once passed by the Senate and signed by the President. Some of the measures include:

1. Loan extension, interest rate reduction, and credit support to the most affected:

  • 3-month repayment moratorium (i.e. loan repayment extension) for all TraderMoni, MarketMoni, and FarmerMoni loans to micro and small business owners,

  • 3-month loan repayment payment extension on all federal government funded loans issued by the Bank of Industry, Bank of Agriculture, and Nigeria Export Import Bank.

  • Reduction of interest rates on all intervention facilities by the Central Bank of Nigeria, from 9% to 5% per annum over 1 year.

  • Creation of a N50 billion credit scheme for households and small- and medium-sized enterprises that have been hit hard such as hotel and airline service providers, and healthcare merchants, etc.

  • Provision of N100 billion credit support for the healthcare industry, particularly pharmaceutical companies, hospitals and health practitioners that want to start new or expand existing drug manufacturing or healthcare facilities.

  • Provision of N1 trillion in loans to boost local manufacturing and production across critical sectors.

2. Tax payment measures to protect employees and companies:

  • Extension of due dates for filling company income tax (CIT) by one month.

  • Extension of the timeline for filling CIT - from the 21st day to the last working day of each month following the month of deduction.

  • Use of electronic platforms for filing and paying taxes, obtaining tax information, and processing of tax clearance certificates.

  • To protect employees, income tax relief to the value of 50% income tax rebate on the total amount due or paid as pay-as-you-earn (PAYE) has been granted to companies, from 1 March 2020 till 31 December 2020.

  • Some state tax authorities have also introduced similar measures for tax payments in the states. E.g. the F.C.T Inland Revenue Service (“FCT-IRS”), has extended deadline for the filing of personal income tax (PIT) returns by 3 months (from 31st of March to 30th of June 2020); while the Lagos State Internal Revenue Service (“LIRS”) extended the deadline by 2 months (from 31st of March to 31st of May 2020).

3. Measures on foreign trade and FOREX:

  • Suspension of import duties on medical equipment, medicines and personal protective gears required for the treatment and management of COVID-19 for 3 months ending in June 2020.

  • To improve foreign exchange (FOREX or FX) supply to the CBN so as to enable them defend the Naira, oil companies and oil servicing companies have been directed to sell FX to the CBN rather than to the Nigerian National Petroleum Corporation (NNPC).

  • The CBN has adopted the official rate of N360 to a dollar for International Money Transfer Operators (IMTO) rate to banks, and a unified exchange rate system for Inter-Bank and parallel market rates to ease pressure on FOREX earnings.

4. Other measure to protect households:

  • The Nigerian Electricity Regulatory Commission (NERC) has suspended the payment of the new electricity tariffs scheduled to commence on April 2nd.

  • The Federal Government slashed the fuel (or Premium Motor Spirit, PMS) price to N123.50 per liter, with effect from April 1, 2020.

  • Deferment mortgage obligations on residential mortgages obtained by individual contributors to the National Housing Fund for 3 months.


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Article Credit: Precious C. Akanonu (Editorial)

Tags: #EconomicMeasures #COVID19 #Nigeria

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