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How COVID-19 is impacting the Nigerian economy
The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has called for an emergency press briefing where he is expected to address growing concerns around the impact of the coronavirus pandemic. Johnson Chukwu, CEO of Cowry Asset Management joins CNBC Africa for more.
Mon, 16 Mar 2020 14:33:10 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The Central Bank of Nigeria announces six initial policy responses to address economic challenges posed by COVID-19, highlighting the need for careful implementation and risk management.
- Market volatility and uncertainty prompt discussions on potential buying opportunities and the evolving nature of global economic conditions.
- Challenges related to currency devaluation, falling oil prices, and flight of foreign portfolio investors underscore the importance of prudent decision-making and monitoring of external factors.
The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, recently held an emergency press briefing to address the growing concerns surrounding the impact of the coronavirus pandemic on the Nigerian economy. In a follow-up interview with CNBC Africa, Johnson Chukwu, the CEO of Cowry Asset Management, shared his perspective on the key takeaways from the press briefing and offered insights on the current state of the markets. One of the main points discussed was the six initial policy responses announced by the CBN to combat the economic challenges posed by COVID-19. These responses include the extension of moratorium on loans, interest rate reduction, creation of a 50 billion Naira fund, credit support for the healthcare sector, regulatory forbearance, and strengthening of the loan-to-deposit ratio. Chukwu emphasized the importance of prompt government action in response to the crisis and highlighted the need for careful implementation of these policies to manage associated risks effectively. He pointed out that while the Central Bank's announcements are significant, the details of how these measures will be executed and the potential impact on commercial banks need to be closely monitored. In the face of global market turmoil and uncertainty, Chukwu addressed the question of whether this presents a buying opportunity for investors. With markets experiencing significant volatility and the impact of the crisis continuing to unfold, he cautioned that it might be too early to determine whether the bottom has been reached. He highlighted rising yields in various market segments as a reflection of ongoing instability and the unpredictable nature of current economic conditions. Chukwu acknowledged the challenges posed by external factors such as falling oil prices and the flight of foreign portfolio investors, which could further impact the Nigerian economy. Despite the uncertainty surrounding the market outlook, he advised investors to approach potential buying opportunities with caution and a long-term investment perspective. Chukwu also discussed the implications of speculations on currency devaluation and the need for a balanced approach to managing foreign exchange reserves amidst growing economic pressures. He emphasized the importance of monitoring global developments and their impact on Nigeria's economic stability. In conclusion, Chukwu highlighted the complex dynamics at play in the current market environment and underscored the need for prudent decision-making and risk management to navigate the challenges ahead. As the situation continues to evolve, stakeholders in the Nigerian economy will need to remain vigilant and adaptable in their responses to ensure resilience and stability in the face of unprecedented disruption.
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