In the agriculture sector, the Anchor Borrower Programme (ABP) has ensured that Nigeria emerged from being a net importer of rice to becoming a major producer of rice, supplying key markets in neighboring countries.
The government instead must have the tools to resolve a failing firm in a manner that preserves market discipline – by ensuring that shareholders and creditors incur losses and that culpable managers are replaced – while at the same time cushioning the broader financial system from the possibly destabilizing effects of the firm’s collapse.