It is customary to count the economic outcomes of every administration after one year in office, as implemented policies are expected to be bearing fruit.
Obasanjo declared that the Tinubu administration is yet to find the right way to handle the economy, as investors are currently laughing at us. Advocates like Prof. Usman Yusuf and Dr Bugaje did not hold back either. They called out the misplaced fiscal policies, the security challenges and even the questionable contracts awarded to this administration’s cronies.
So, it is not surprising that Tinubu chose to blow his own trumpet by launching the Lagos-Calabar highway despite the controversies surrounding it, including its economic benefits, the due process involved in the contract award, and the questionable feasibility of the project. He went on to claim that the 700km highway will provide jobs for 30 million people. But it is not uncommon for such a statement to come from Tinubu. On the contrary, as is the case whenever he opens his mouth, the fact tells a different story.
So, what are the facts on the ground? I spent the past year studying the evolution of the Tinubu presidency since his inauguration speech, when he announced petrol subsidy removal, reduced interest rates, and unified the foreign exchange system. That was when his economic trouble started. Since then, they have gone on to remove other subsidies from various sectors, including education and electricity. Then, they went back to start paying fuel subsidies again, printing more money, interfering in the FX market for the wrong reasons and raising the interest rate for the third in 2024 alone.
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The consequent outcome of these policies is the cost-of-living crisis because businesses kept increasing their prices to pay for higher input costs. The value of the naira kept evaporating every day with no stability in sight. Average citizens cannot use money to buy food, start a business, or pay for their daily needs as they used to do 12 months ago.
The headline inflation rate, 33.69%, is at a 28-year high, and food inflation is at 40%. Food inflation is another tax on those who use all or a large part of their income to buy food. They will need an additional N400 to buy what they used to buy for N1000 just a year ago. This is why we say inflation is not just a hidden form of taxation; it is a very regressive form of taxation because it disproportionately affects the poor.
Instead of designing policies to help people, they spend time explaining why they cannot succeed. Hearing the CBN governor saying that the government has no magic wand to turn around the unstable markets and the economy is an indication that they are losing control. Such a statement should not come from a policymaker who is targeting a trillion-dollar economy. A person responsible for Nigeria’s monetary policy and financial system stability ought to know such statements only reduce people’s confidence in the economy.
Similarly, the roundabout reforms with cryptocurrency, BDC operators, the cybercrime levy circular and more have only created more volatility in the financial markets and, by extension, the economy. But this is not an isolated case; it is happening in sectors like power, finance, education, and a few more.
Due to the poorly informed reforms in the economy, foreign investors are moving away from the country due to a lack of confidence in the market, uncertainties surrounding the reforms, perceived risks, and expectations of better returns elsewhere. Companies are reporting losses due to FX instability, and many are moving out of the country. TotalEnergies is snubbing Nigeria by announcing a $600 million investment deal in Congo. The Danish shipping and logistics company Maersk Nigeria had to debunk Tinubu’s claims that they would be committing to invest $600m in the country.
P&G closed its $300 million facility in December. Other global multinationals that have left include Unilever, GSK Plc, Bayer AG, Sanofi Aventis, ExxonMobil of the US, Italy’s Eni, Norway’s Equinor, and China’s Addax. This reaction is grounding the country’s ability to move away from the much-disliked import-focused economy, but this is where we find ourselves.
The debacle of this Tinubu presidency reminds me of the UK Prime Minister, Liz Truss. Like Tinubu, it was all supposed to be different when she started announcing the purest neo-liberal free-market policies since Thatcher. But as soon as the British people realised how catastrophic it was going to be, she was forced to resign after spending just 49 days in office. One can only wish this for Nigeria whenever we see these politicians perform poorly.
Ideologically, we should all believe that Nigeria can miraculously change overnight. All that is needed is some patience, some promise, some prophecy, some conviction, and perhaps flying some clerics to Makkah and Jerusalem to make it happen. Of course, it is sarcasm. But I do so only because the Tinubu administration is fond of doing it, too. You hear them say, ‘You have to wish Tinubu well – it is only when you believe in his mandate that your belief will make it come true.’
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