Economic Downturn: The essentials of intervention programmes to cushion depressing strains

Addressing economic strains by government interventions became a model of macroeconomic management since the depression of 1930s, which saw a paradigm shift from the law of invisible hand to the reflections of why interventions of government to regulate the system is important.

Since Nigeria’s economy began to suffer declining tones with woeful deficits, the need for interventions to salvage same from the mire of discordance has become of necessity, just as the necessity to bring into place balms of relief to businesses and persons has been a course at the front burner of discourse. The harsh conditions put before businesses and persons have prioritise the need for concrete interventions to reflect socio-economic effects with relevant bearings to prevent socio-economic fabrics of the Country from collapsing.

The subject of fiscal and monetary interventions to rescue businesses from collapse has become necessary. Such interventions demanding policy instruments to critical sectors, such as those of the manufacturing and the agriculture sectors, which are largely threatened by the scorching defects of the economy, are sine qua non to salvage the Country’s economy. The continuous failing of businesses across sectors calls for coordinated interventions.

Small businesses have been poised to threats of liquidation as the harsh conditions toppled by unending inflation has pushed many of these businesses out of operation.

The compounding impacts have seen its reflections worsening unemployment rate in the Country. The rippling impacts are those of turbulent deformities heating up the polity. The scourge of insecurity and aggression across the Country, have not been excused from the worsening profile of economic conditions, the associated loss of jobs, underemployment and huge unemployment rate.

The subject of the coordination of policies to raise interventions in response to preventing further threats frustrating businesses out of operation and its attendant impacts on the population, is still, of course, very much a serious subject in view. While it cannot be argued that there are no interventions to this effect, it is more of sincerity to state that while interventions speaking to this necessity do exist, a number of defective gaps have left many of them falling short of their value and relevance to the purpose they stand to address. Issues of implementation, awareness, management, and synchronisation of these interventions are of concern.

The blend of interventions in coordinated patterns within a definite framework for concerted purposes, remains sacrosanct. This is one significant part of policy management to ensure intervention policies in their scope, nature, timeliness, and degree of value, do not counter-oppose the patterns of their aims and objectives. Hence, having intervention programmes coordinated within articulated framework of patterned directions to achieve one broad common goal in crescendo, is one important luxury the custodians of economic policy makers must put strategically in view.  As would be observed, while it cannot be said that there have not been interventions to salvage businesses from collapse and keep individuals productively engaged, poor awareness, among other challenges, have been resounding.

Strains of economic downturn had received harsh undertones after the COVID-19 pandemic, demanding incentives and critical fiscal interventions for businesses. A number of policy responses to these needs have largely remained un-optimised, partly due to poor awareness and also partly, bureaucratic bottlenecks. The Bank have had among its fiscal and monetary interventions such policies as the adoption of the Heterodox Monetary Policy Broad Money Supply (M2), financing interventions in the manufacturing sector, agriculture, energy/infrastructure, healthcare, and Micro, Small, and Medium Enterprises (MSMEs) with the Targeted Credit Facility, Anchor Borrowers’ Programme (ABP), disbursement of funds through the Healthcare Sector Intervention Facility (HSIF), implementation of the Tertiary Institutions Entrepreneurship Scheme (TIES), disbursement to  Distribution Companies (DisCos) under the National Mass Metering Programme (NMMP) and the Nigeria Bulk Electricity Trading Payment Assurance Facility (NBET-PAF),  the Bank also recently introduced the 100-for- 100 Policy on Production and Productivity (PPP), designed to create the flow of finance and investments to enterprises with the potential to kick-start a sustainable economic growth trajectory, accelerate structural transformation, promote diversification, and improve productivity in the country, among others.

Recently, the Central Bank of Nigeria (CBN) urged Nigerians to avail themselves of its intervention programmes to promote financial stability and economic development. The CBN Director of Corporate Communications, Mr Osita Nwanisiobi, at the opening session of a two-day fair organised by the Apex Bank in Owerri on Wednesday, 27th, April, 2022, observed Nigeria’s over-dependence on importation was a factor responsible for the fall in the exchange rate of the Naira. According to him, the Bank’s interventions were aimed at business emancipation and poverty reduction.

Speaking on the theme, “Promoting Financial Stability and Economic Development,” Nwanisiobi said that the CBN had rolled out interventions in the agricultural, manufacturing and other sectors. According to him, the CBN’s Anchor Borrower’s programme was the nation’s saving grace for increased availability of rice during the heat of the COVID-19 pandemic. “During the COVID-19 pandemic, rice was the most single popular component of our palliatives. This is a result of the CBN’s Anchor Borrower’s programme for rice farmers,” he said.

Speaking on the relevance of the manufacturing sector, he said, “No successful economy thrives on promotion of imported products over the exportation of locally manufactured products,”  Nwanisiobi represented by the Deputy Director, Corporate Communications Department, Mr Sam Okogbue, said.

Interventions are critical to businesses and individuals at the moment. However, it is counterproductive, if largely these policy interventions are not optimised due to administrative deficiencies. Awareness remains key. It therefore behooves the managers of these interventions to galvanise efforts strategically to remove not only the bottlenecks of deterrence against accessing the provisions and benefits of the interventions, but also strengthen the echoes of awareness of the various intervention programmes to avail citizens who should be the beneficiaries, the benefits thereof. Leaving the intervention programmes in obscurity is a limbo that would defeat the essence of the purpose to salvage the Country’s economy from the scourge of woeful downturns. Nigeria now is in the midst of toughened strains and the importance of pragmatic interventions cannot be overemphasised as the economy suffers depressing conditions.