Saying it prudently, it is despicable for this administration to announce that the inflation rate will reduce to 15 per cent by the end of this year. Nigerians demand to know how Tinubu and his administrators—ministers and special advisers—arrived at the magic number of 15 per cent of the inflation rate before digging deeper into their understanding of macro-economy.
A point of note is that cutting inflation is for the CBN, not the government. So, it is not appropriate for the government to have a pledge to reduce inflation. That is not the job of the president or something over which he has much control. This should not have happened even if the CBN governor had first announced it, as it would be termed an opportunistic pledge.
Considering there was no announcement by the CBN governor, one will not be wrong to presume Tinubu to be undermining the Central Bank’s independence even though inflation could be viewed as a fiscal phenomenon as well as a monetary one.
For the sake of credibility, the people deserve to understand how Tinubu and his administrators derived this magic number. First, the figure will be included in the rulebook as part of the 2025 budget’s guideposts. Second, we do not want mediocrity recorded in our history books.
Besides, any clear-thinking expert who follows Nigeria’s fiscal and monetary policies can attest that Tinubu’s announcement is an overreach. It also brings back the traumatic memories of “subsidy is gone”, which the country may never recover from.
It is on record that Tinubu and his administrators are in a constant cycle of repeating mistakes, not learning lessons, and not intending to change. I often worry about how they ignore economic history and legends. Successful economic models in traditional and democratic systems across various regions of Nigeria can be adopted. Common sense suggests using all these assets—reading, listening to past leaders, and studying them—to understand how to adopt them in the current policy style.
However, their announcements always suggest a strong belief that the executive powers of the president can condition the people to accept that the economy is improving despite the glaring evidence. But if the administrators think so, a rational leader—the president—ought to have thought differently. As the head, despite what he now knows, it is a wonder that Tinubu still feels the economy can be run with conspirative words alone.
King Canute’s analogy serves as a cautionary tale. He educated his courtiers on the futility of commanding the sea tides to stop. Humans cannot control the natural forces of the sea. Contextually, the government cannot simply “command” inflation to fall by decree. Attempts to control inflation through populist or short-sighted measures often lead to unintended consequences, such as stagflation and market volatility.
The lesson is for the administration to accept that inflation is driven by economic forces, not human wishes or prayers. It only responds to the factors that trigger it. Anyone thinking that inflation will respond to human commands or prayers is delusional. However, they can solicit prayers to adopt the right attitude and implement sound strategies, just like we pray for competent governance, even though there is no guarantee that the prayer will be answered.
Let us be clear: the whole point of this column is to caution Tinubu and his administrators about economic policies. Their announcements and implementations need to align with reality, which they are not currently.
In a democratic setting, we must pay attention to how Nigerians feel about their own situation, whether or not Tinubu “his” target of getting the rate of inflation to 15 per cent by the end of the year is much ado about nothing. Most Nigerians see that magic number as something else entirely.
The communication makes it seem that it will not be a falling inflation but a sharp deflation in the cost of goods, services, etc. Deflation will not going to happen. And a result, the government is going to continue to face a lot of voter anger over inflation—T-Pain—as we go into the campaign year. The recent UK election should serve as a lesson as the then incumbent, Rishi Sunak, lost despite promising to halve the inflation in one year.
If progress is to be achieved, the Tinubu administration must identify its problem. Inflation is a symptom, not a stand-alone issue. It signals deeper problems and typically reflects underlying economic conditions and shocks. The announcement would have been welcomed if it had been combined with a road map to reduce inflation, as American President Biden did in 2022.
Let’s not forget that Biden’s Party still lost the election despite delivering on the Inflation Reduction Act. The Act included heavy investments, including $369 billion for clean energy and climate initiatives. It also reduced minimum corporate tax rate on large companies by 15 per cent to help raise revenue and reduce the fiscal deficit. The revenue was channeled to economic stimulus to incentivise investments in domestic manufacturing industries. Overall, the Act created more jobs and boosted industrial output.
Some may argue, perhaps naively, that Tinubu can disregard the lessons of King Canute, avoid the failures of Sunak, and even achieve Biden’s goals without adopting similar programmes. This is because there is a projected cloud that he still wields an uncomfortable level of political influence. People can accentuate the rhetoric of prosperity and reform, but in reality, not much has changed in addressing the deep-rooted hardship of Nigerians since he was sworn in.
Again, the intent is not to apply the same wisdom of economic policy to politics, but the economic outcome is evident. The policy statements are documented and easily accessible, even on social media. As it stands, there is far less room for error; every claim is subject to scrutiny and analysis, as this is the last year before the campaign year.
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