COVID-19, economic stimulus and time lag

“We have undergone countless number of trainings in the past several months, but we have not been able to access these their loan facilities for the SMEs,” a key member of the National Association of Small and Medium Enterprises (NASME) in Lagos, complained bitterly, recently. This entrepreneur was really bemoaning what has become the fate of most micro, small and medium-sized business owners in Nigeria in recent times.

A plethora of special loan facilities, each with different and specific conditionalities, are out there, but the potential beneficiaries are literally going through hell to secure these loans. ln many instances, the existence of these “special facilities” are fully noised abroad, but the modalities for accessing them remain largely foggy. Usually, the time lag between the official pronouncement of the existence of the facility and the hammering out of the ‘modus operandi’ ends up frustrating the target beneficiaries.

This situation, truly, was in normal times, when the relevant organs and agencies of government worked at their normal pace. Today, the times have changed; the coronavirus (covid-19) pandemic is unleashing panic everywhere on the surface of the earth. The death toll is in tens of thousands; virtually all economic activities have stalled, and yet hope of the end of the plague remains forlon.

So, in fairness to all, the plethora of policies and measures being pushed out by government agencies, especially, the monetary and fiscal authorities to cushion the covid-19 effects are, without doubt, panic initiatives. Many of those policies are, without any bias, ill-digested and unrealistic at this point in time.

For instance, an economic stimulus package that pupports to be encouraging business growth or expansion at this time, when companies are either shutting down or maintaining skeletal operations, is rather insensitive. The issue now is survival: let the human beings remain alive. Global and local supply chains have all collapsed. Practically all countries have closed their borders, whether by air, land or sea.
Whether the interest rate is zero or not, which business (run by humans) will be taking loans now? lf you are to import raw materials or machinery, from who/where?

There is palpable panic in the land. Here in Nigeria, covid-19 has entered the ‘sanctum santorum’, the Presidency; some presidential aides are already down with the disease. Federal and state civil servants are sent on “leave”. Many top government officials have either been quarantined or self-isolated.
Against this backdrop, who is in a state of mind and safety to see to the realization of those policies being churned out? An agency like the Federal Inland Revenue Service is issuing statements, asking taxpayers to be dutifully paying their taxes, even now. The agency is encouraging all taxpayers to pay, so that government can have money to put “palliative measures” in place now. And the question is: are the taxpayers making money now? Are businesses up and running?

In other climes, the authorities are not only crashing the interest rates but also reportedly making cash available to economic agents through “transfer payments” and sundry other channels. Online businesses are also rendering support by subsidizing their services and, in some instances, ‘pro bono’.

Apparently, in their appreciation of the bizarre and dire situation of businesses in Nigeria now, the House of Representatives (HoR), passed the ‘Economic Stimulus Bill’, but want import duty, and corprate tax suspended. This is to encourage importation and discourage taxing businesses, in the interim, at least. But while the HoR was passing the Bill and sending to the Senate for concurrence, the entire National Assembly shut down, and went on “leave”.

This, again, illustrates the time-lag challenge; and yet the covid-19 pandemic keeps spreading like wild fire, claiming lives at exponential rate across the globe.