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 at 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 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 gemstone 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 organization. The fire there, the Bible tells us, burns 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 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 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% 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 trippled their fares beyond the reach of the average Nigerian. Job losses are chalking up in thousands.
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 programmes 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 suggest 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, 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 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-Progressives 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 resultant 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
