In the final instalment of my analysis of the presidential media chat, let’s delve into the issue of price control. Since the late 1980s, successive governments in Nigeria have embraced free market principles, resulting in deregulation and minimal government intervention in economic affairs.
Implementing price control measures is not feasible under the current administration, largely because President Tinubu does not believe they are effective.
As Nigeria welcomes the New Year, the country is grappling with soaring inflation rates. In November 2024, they rose for the third consecutive month to a near 30-year high of 34.6%. Food inflation has also surged to 39.93%, a significant increase from 32.84% in November 2023.
Despite the administration’s efforts to alleviate the economic burden on Nigerians, its policies have yielded minimal results. The government’s strict adherence to economic liberalism and market forces further reinforces the notion that price control measures are not a viable solution.
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In essence, the administration’s focus on promoting economic growth through market forces may seem challenging to the welfare of low-income individuals, highlighting the need for a balanced approach that prioritizes both economic growth and social welfare
One may recall in a national broadcast to the nation on July 31, 2024, the president announced a N500 billion palliative plan, which included funds for acquiring buses, boosting agricultural production, supporting manufacturers, and providing relief to micro, small, and medium-sized enterprises. The plan also involved investing N50 billion each in rice and maize cultivation. There was also an attempt to sell grains from the strategic food reserves which was also unsuccessful, as the reserves were empty.
The administration’s palliative plans to control prices by declaring a state of emergency to improve food security, and then suspending import duties, have not worked. The cost of feeding has been on a steady increase and Nigerians are not finding it easy. People are just living every day as it comes and hoping that the policies will take a positive turn or there will be more hardship for citizens in 2025.
However, these palliatives have failed to provide significant relief to Nigerians, who continue to suffer as the economic situation worsens.
The reform was not designed to inflict pain on Nigerians but necessary for growth. These reforms implemented by the administration since it came to power are intended to stimulate economic growth, not cause undue hardship for Nigerians as the president claimed.
But in reality, these reform efforts have been severely misguided, likening them to “chopping off a person’s legs without giving them anaesthesia or providing drugs to prevent inevitable infections.
However, the reforms have led to significant price increases that disproportionately affect the poor, exacerbating the existing economic challenges. To effectively tackle the current challenges, the administration must adopt more sustainable and comprehensive solutions.
This requires a two-pronged approach: Fiscal Prudence: Implementing fiscal discipline to ensure responsible management of public finances.
Monetary Policy Reforms: Introducing targeted monetary policy reforms to stabilize the economy and promote growth. This can be achievable by tightening its belt and pursuing these reforms with empathy, the administration can restore stability, drive economic recovery, and build a more resilient future for the nation.
Every reform requires a multi-faceted approach. Enhancing social protection is crucial to safeguard the poor and vulnerable populations. This involves implementing measures to protect citizens from the negative impacts of economic reforms. Encouraging Private Sector Growth is vital to create productive jobs and stimulate economic expansion. This can be achieved through policies that promote entrepreneurship, innovation, and investment.
Investing in Human Capital: is essential to improve productivity and competitiveness. This includes investing in education, healthcare, and skills training to equip citizens with the necessary skills to compete in the global economy.
However, the administration’s focus on promoting business growth may seem challenging to the welfare of low-income individuals. Therefore, the administration needs to strike a balance, between promoting economic growth and ensuring the well-being of all citizens, particularly those most affected by market fluctuations.
On oversized cabinet and other appointees; President Bola Tinubu has expressed confidence in his cabinet, asserting that its current size is justified and that the ministers are fulfilling their duties.
He believes his cabinet deserves credit for their efforts and sees no need for investigations into their activities. However, critics argue that the country’s constitution, which requires at least one minister from each of Nigeria’s 36 states, results in an unwieldy cabinet that exacerbates the nation’s economic woes.
The high cost of governance, largely due to the oversized cabinet and numerous appointees, is a significant concern. A substantial portion of the budget is allocated towards recurrent expenditure, including salaries, allowances, and benefits for government officials.
This has led to unsustainable governance costs, with recurrent expenditure surpassing capital expenditure and hindering economic growth.
To address these challenges, experts recommend reducing the cabinet size, merging ministries and agencies with overlapping functions, and implementing cost-saving measures like E-governance and E-accounting systems.
These reforms are crucial for Nigeria’s prosperity, as they would help streamline governance, promote economic growth, and alleviate the burden on taxpayers. The cost of governance in Nigeria is exceptionally high, with the World Bank noting that the country spends only $220 per Nigerian per year. This is further exacerbated by the fact that 60% of the country’s overall spending is absorbed by public sector salaries and pensions, leaving limited fiscal space for implementing development projects
Let us not forget within 18 months of taking office, President Tinubu’s administration has accumulated approximately $9.87 billion in foreign loans.
Regardless President Tinubu has justified the borrowing, citing the need to address pressing issues and prioritizing long-term investments for future prosperity but rationale has ignored the widespread poverty and cost of living crisis across the country as caused by administration policies or, worse, intentionally leading the nation down a questionable path.
This excessive borrowing is a clear indication of the government’s insensitivity to the struggles of its citizens. To alleviate Nigeria’s economic woes, experts emphasize the need for a more sustainable approach to harnessing the country’s vast mineral resources.
Still, the president expects the citizens to have faith in the reforms in spite of the alarming concern where the staggering personnel and pension costs of N8.52 trillion, combined with the debt service cost of N16.33 trillion, totaling N24.85 trillion this enormous sum accounts for 53.98% of the entire N46.02 trillion 2025 budget.
Wishing Nigerians a Happy New Year. May Allah bless our beloved nation, forgive our shortcomings, and bestow upon us His infinite mercy. May He frustrate the schemes of those who harbour malice against our great nation, Nigeria. May Allah unite our nation under the principles of justice, peace, love, and faith. May He fill our hearts with love, appreciation, and celebration of the diversity that makes our nation a beautiful tapestry.
Dukawa wrote it from Abuja and can be reached at [email protected]
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