The Central Bank of Nigeria has fixed the maximum loan amount that a participant in its newly introduced initiative, called ‘The 100 for 100 PPP – Policy on Production and Productivity’, can get at N5bn.
The CBN disclosed this in its guidelines for the implementation of the initiative which was released on Saturday.
It said, “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.”
The apex bank said the initiative 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.
“Loan amount shall be a maximum of N5bn per obligor. Any amount above N5bn shall require the special approval of CBN’s management,” it said.
It said interest rate under the intervention would be at not more than five per cent per annum (all inclusive) up to February 28, 2022, adding that interest on the facility would revert to nine per cent p.a. (all inclusive) effective from March 1, 2022.
According to the guidelines, 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 to catalyse import substitution of targeted commodities, increase local production and productivity, increase non-oil exports, and improve foreign exchange-earning capacity of the economy.
It said focal activities covered under the initiative would be existing businesses and projects (brownfield) with the potential to immediately transform and catalyse the productive base of the economy, and new projects (greenfield) with equal potential may be considered under the initiative, subject to CBN management’s approval.
The central bank said the activities could be in manufacturing, agriculture and agro-processing, extractive industries, petrochemicals and renewable energy, healthcare and pharmaceuticals.
According to the guidelines, others are logistics services and trade-related infrastructure such as cold chain solution, quality assurance infrastructure; and any other activities as may be prescribed by the CBN.