By Kalu Okoronkwo
President Bola Tinubu’s assumption of office on May 29, 2023, marked a critical moment in Nigeria’s political landscape, evoking both expectations and scrutiny. His landmark speech during his inauguration that brought about the much-touted oil subsidy removal was a turning point in the country’s economic policy. This is because many perceived the issue of subsidy removal as a hard nut to crack hence previous administrations only paid lip service to it.
Six months in the life of a new administration is very much early day for
a four- year tenure but the augury mirrors what lies ahead.
An unbiased and dispassionate assessment of Tinubu’s first six months in office can only return one verdict: it has bought unmitigated hardship and thrown more Nigerians into multidimensional poverty. Food inflation is at its highest ever that even a bulb of onion has become a gem stone to be pampered and cherished.
The “removal” of fuel
subsidy (we understand there is still some price stabilization mechanism going
on) and the merger of the official and parallel foreign exchange rates have
made living and life a hell in Nigeria that many had taken the option of ending
their life and going to the “real” hell where there is some form of
organization. The fire there the Holy Book tells us burn in perpetuity.
Two international organizations
have recently rated Tinubu’s economic policies within the first six months very
low thus buttressing the reality of the administration’s defective leadership.
While the Financial Times of London described the policies as “flawed”, the IMF
has doubted Nigeria’s quest for growth under the policies of the present
administration.
Leadership is often measured by
the impact of policies on the lives of the citizens. Within the first six
months of President Ahmed Tinubu’s administration, certain policy initiatives
and their implementation have come under intense scrutiny for the unmitigated
hardships imposed on the populace. But it seems that the administration has
adopted a policy of “suffer now, enjoy later”, a prospect the citizens are not
seeing in the horizon.
As the custodian of the nation’s
well-being, the government’s responsibility is not only to enact policies but
to ensure they uplift rather than burden the citizens.
For instance, the administration’s
economic policies, particularly those related to fiscal and monetary measures,
have been a source of considerable hardship. The implementation of, currency
devaluation, and subsidy removals have led to an unprecedented surge in
inflation, significantly diminishing the purchasing power of ordinary citizens.
In its assessment of the
implementation of the naira devaluation, the International Monetary Fund (IMF)
has faulted the economic policy of Tinubu’s administration insisting that
Nigeria is not positioned to benefit from such policies not being an
industrialized nation.
The IMF argued that where goods are produced for export, devaluation of a
country’s currency will result in attracting foreign investment taking
advantage of the competitive value of the currency to invest and export.
The obvious implication of this policy by the Tinubu’s administration is that
the naira has been open to wild fluctuations and compounding the economic woes
of the citizens who depend more on imported products.
The devaluation of the naira has
also led to depletion of the country’s external reserve as government has to
inject the hard-earned currency to shore up the naira most times. When the
naira exchanges for N1200 to the dollar and N1500 to the pound sterling in a country
with over 80 per cent poor population and depending heavily on imported
products, how does the government expect its poor citizens to survive?
The administration’s foreign
exchange policies have faced criticism for their impact on businesses. The scarcity
of foreign exchange and strict currency controls have impeded the operations of
businesses as value chains are disrupted due to scarcity of foreign currency.
The era of Letter of Credit, a well-known economic route of sourcing raw
materials and other goods abroad are long gone leaving businesses to seek
foreign exchange in the expensive parallel market. The resultant effect is the
collapse of many businesses. Multi-national organisations are also leaving our
shores by the day, while some foreign airlines frustrated by their inability to
repatriate sales abroad have avoided the Nigerian airspace. Those who are still
coming have tripled their fares beyond the reach of the average Nigerian.
The decision to deregulate fuel
prices, ostensibly to encourage market-driven pricing, has resulted in a domino
effect on transportation costs. With fuel prices subject to market forces, the
ripple effect on public transportation has been profound. Many unable to
afford even intra-city transportation have resorted to trekking to their
destinations. A regular sight at different bus stops in Lagos for
instance, are people massed together not waiting to board a public transport
but hoping to get a free ride from car owners. So they surge like an ocean in
high tide anytime a private car stops at the bus stop hoping to be the lucky
one.
While the administration has
initiated various social intervention programs to alleviate poverty, the jury
is still out on their impact.
Rising poverty rate and an
increasing number of citizens falling below the poverty line suggests a
misalignment between the design and execution of these programmes and the
persistent hardships faced by the vulnerable population.
Government seems unconcerned by
the obvious implication of its fiscal policies which is stifling the population
as there is no sign of obvious solution in sight.
Given the hardship and high cost
of living in Nigeria, one of Nigeria’s oldest and biggest manufacturers of
FMCG, Procter and Gamble (P&G) just closed its manufacturing arm in Nigeria
with attendant job losses. Citing high cost of doing business in Nigeria, the
manufacturer decided to change its business strategy in Nigeria and opted for
importation of the products abroad where economic policies are friendly.
What an economic ragedy.
This is coming on the heels of
the departure of the giant pharmaceutical company GlaxoSmithKline
(GSK) which also recently relocated its manufacturing from Nigeria.
With the hue and cry of the
citizens over the eight years presidency of the All-Progressive Congress (APC)
under the Buhari’s administration, Nigerians never bargained for an extended
unmitigated suffering and the kind being witnessed under the present
administration.
One of the glaring issues
affecting the Nigerian economy under the APC administration has been the
persistent rise in inflation. The soaring prices of essential commodities,
coupled with a weakening purchasing power, have significantly burdened ordinary
citizens. Despite various policy interventions, the inflationary trend has
proven stubborn, adversely affecting the living standards of Nigerians.
The promise of job creation was
a basis of the APC’s economic agenda. However, the reality has been a surge in
unemployment rates. The failure to generate sufficient employment opportunities
has left many Nigerian youths and families disillusioned and frustrated. The
effect is that Nigerians are deserting their country in thousands every day to
other countries with conducive economic environment where they hope to apply
their skills to earn a better living. High unemployment not only hampers
economic growth but also poses social and security challenges for the nation.
Too many other economic
challenges have prompted the citizens to question the need for much promised
Renewed Hope mantra of the APC and the Tinubu administration.
Paradoxically what people see in
this administration is a culture of waste and ostentatious living: buying of
expensive SUVs, controversial presidential yacht, carnival-like foreign trips
burning the scarce foreign exchange, personal luxury like renovation of the
residences of the President and his vice with sums running into billions of
Naira. Pray, were the buildings hit by an earthquake because the two top
citizens of Nigeria lived and only vacated those apartments about six months
ago. Did they removed the blocks, roofing and the wiring? What is the
cost of a brand new building from foundation?
The Tinubu administration must
as a matter of exigency examine how present policies can be recalibrated to
foster economic growth, reduce inequality, and improve the overall well-being
of the citizens.
Ensuring fiscal responsibility
and transparent governance is paramount for rebuilding trust and confidence.
Clear communication about economic policies, their objectives, and their
expected impact is essential. This transparency helps in managing public
expectations and fostering a sense of shared responsibility for the nation’s
economic well-being.
Moving Nigeria forward requires
inclusive governance that involves all stakeholders in the decision-making
process. Engaging with civil society, organised private sector and the
general public can lead to more informed policies that reflect the diverse
needs of the population.
This collaborative approach
ensures that policies are better suited to address the complexities of
Nigeria’s socio-economic landscape.
In assessing the policy
initiatives and their implementation under President Tinubu’s administration,
it becomes apparent that the well-intentioned efforts to address various
challenges have, in many instances, translated into unmitigated hardships for the
citizens.
As the nation contends with
economic uncertainties, rising inflation, security concerns, and social
vulnerabilities, a critical examination of policy strategies is imperative. The
path forward requires immediate introduction of policies that not only confront
challenges head-on but also prioritize the welfare and prosperity of the
Nigerian people.
While Nigeria is facing economic challenges , it is essential to view these challenges as opportunities for positive transformation. By embracing comprehensive economic reforms, prioritizing social welfare, creating job opportunities, accelerating infrastructure development, and fostering inclusive governance, Nigeria can move faster on a path of sustainable growth and development.
The collective
effort of government, private sector, and citizens is paramount in shaping a
future where economic policies are not just markers of change but catalysts for
progress and prosperity for all. For now, Nigerians are divided on whether the
country under Tinubu is on the path of redemption or Golgotha.
*Okoronkwo,
a leadership and good governance advocate writes from Lagos and can be reached
via kalu.okoronkwo@gmail.com
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