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The King Canute theory of Tinubunomics

The leading discussions in the past few days have been about motorists enduring long queues at fuel stations, black-market petrol prices being extremely high, electricity…

The leading discussions in the past few days have been about motorists enduring long queues at fuel stations, black-market petrol prices being extremely high, electricity being unreliable, and the naira getting weaker in the forex market. In short, life is harder than before. As the cost-of-living crisis bites harder, Tinubu went to the World Economic Forum in Riyadh to discuss what Nigeria ‘ought to be.’ The good thing is that the world leaders listening to him have access to the data.

Tinubu’s convictions, despite the evidence, remind me of the leadership style of Liz Truss, the UK’s shortest-serving Prime Minister. Like Truss, Tinubu seems to be in denial of the realities on the ground. Evidence shows that Tinubunomics is unsuccessful in every aspect, including the revised IMF forecast of GDP growth of 3.3 per cent, which is below the average of sub-Saharan Africa of 3.8 per cent. Why? Because the policymakers misapplied the prescribed economic policies and misjudged the economic consequences. This is why I borrowed Marvyn King’s adage to coin it under King Canute’s theory.

King Canute was a Danish king who ruled over England and parts of Scandinavia in the 11th century. The legend has it that the king went out to the windy sea, where he placed his throne. He then commanded the incoming waves to stop before reaching him, aiming to avoid getting wet. On the contrary, the waves paid no attention to the king’s orders. The laws of nature pushed the waves, and they rose high enough to cover King Canute’s feet, legs and the throne.

Under Tinubunomics, it is assumed that the waves—the ongoing economic hardship—will eventually obey his command and stop. The administration assumes that “the economy will adjust because they say it will.” That is the trouble. We all wonder how they plan to condition the formidable forces of nature.

Listening to Tinubu in Riyadh justifying the removal of fuel subsidies and the unification of the forex market tells you they will continue as they began 12 months ago. The sad reality is that they audaciously think this to happen without consequences. They will continue to cut down public investments and subsidies with the narrative that our public agencies cannot carry the weight. They will push for free market ideologies, placing individuals and individualism at the centre of every moral, economic, and social challenge facing the country.

The Minister of Power is already threatening that if the proposed electricity tariff hike is not implemented within three months, there will be a nationwide blackout.

If lessons have taught us anything since 2015, it is that this approach has led to a series of first-order and second-order mistakes. Never before have had policies had such devastating consequences for this country. So, the effort that goes into denying responsibility or dishonestly justifying this double failure is quite phenomenal.

Justifying that the country would have been bankrupt if the fuel subsidy had not been removed shows a lack of foresight, as the country still pays for it. His emphasis on the need for subsidy removal to redirect funds towards infrastructural development, asserting that it would benefit the masses in the long run, is misleading.

The 2024 budget set aside N1.32 trillion, five per cent of the budget for infrastructure, including provisions for Works and Housing, Power, Transport, Water Resources, and Aviation. Comparatively, in 2022, the last year when a petrol subsidy was declared, NNPC data showed 4.39 trillion naira was spent on petrol subsidy. The funds do not match as he claimed despite the naira being devalued by about 40 per cent. Evidently, there is not enough money going where Tinubu says it will. And the subsidy removal is hitting the poor and working people hardest because they rely on cheap fuel for everyday life.

His assertion that the forex market is stable is also incorrect. Thinking that the economy will grow does not mean it will, and international investors are aware of this. For example, information about dwindling oil production and large corporations leaving the country is in the public sphere. Investors are attracted to successful pragmatic policies that will bring them profit. If the policies are half as good as they sell them to be, they will need not to worry. But as things stand, they will be left in a chaotic economy with wrong information and unreliable partners.

Therefore, to truly attract FDI, this administration must demonstrate a commitment to sound economic policies, transparency, and the rule of law rather than relying on optimistic rhetoric alone.

Reflecting on King Canute’s legend, his purpose was to prove to his courtiers that he was not unstoppable and could not, by words alone, undo the forces of nature. Even a king’s authority had its bounds. The story is often interpreted as a lesson in humility and the recognition of the natural order’s supremacy over human authority. So, this administration needs to recognise that flowery words cannot overcome the forces of nature, and reversing their harmful economic policies will demonstrate humility and empathy. But knowing that they are totally unprepared for scrutiny because they are never used to it, these words of caution will fall on deaf ears.