• Wednesday, June 19, 2024
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BusinessDay

Inside Tinubu’s first 40 days

President Bola Tinubu’s first 40 days in office contrasted sharply with that of his predecessor.

For Muhammadu Buhari, success at the polls had come after three successive failed attempts to become president. His two terms as leader of Africa’s most populous nation has been described by many as unimpressive.

“That Buhari managed to turn such wild enthusiasm about his candidacy into grave disappointment,” said Ebenezer Obadare of the Council on Foreign Relations, “going from a regime of which many, rightly or not, had high hopes, to one that most can’t wait to see the back of, ranks among the most remarkable instances of reputational collapse in the whole of Nigerian political history. It was clear within the first few months — the initial struggle to put together a cabinet being particularly telling — that Buhari, for all his desperation to take power, had not done his homework and was ill prepared for the demands of the office.”

Buhari’s first 40 days in office were uneventful. He admitted in January 2018 that he was never in a hurry to do anything.

He delayed setting up a cabinet for about six months after he assumed office, an outcome that analysts partly blamed for plunging Nigeria’s economy into recession in 2016.

“I don’t know why people are so anxious about ministers. But eventually we will have them,” he told journalists in June 2015.

The opposition Peoples Democratic Party, in response to the former president’s approach, called for prayers to save the government from further inaction and dithering.

“We urge Nigerians to join hands in prayers and offer useful suggestions to President Muhammadu Buhari and the APC because with what we have seen in the last 30 days, the present administration is finding it very difficult to get its bearings right while showing no inclination towards implementing its numerous campaign promises for which they were voted into office at the centre,” Olisa Metuh, the then spokesman of the party, said at the time.

He added: “We are deeply worried that the President who promised to unveil his cabinet two weeks after his inauguration has not been able to decide on key appointments such as ministers, Secretary to the Government of the Federation (SGF), a Chief of Staff and advisers in key sectors of the economy.

“This is more so as the delay has brought government business in ministries, departments and agencies to a dangerous standstill with coordination of important policies vested on ministers and the SGF now in tatters while the system drifts. This situation also creates loopholes through which overzealous persons around that President can connive with unscrupulous elements in the bureaucracy to siphon public resources in addition to possibly misleading the President to violate due process by spending beyond and outside his statutory limits.”

Unlike his predecessor who came into office with a deep fund of goodwill, Tinubu is faced with a crisis of legitimacy, which he is skillfully navigating.

He is facing a judicial inquest into his election as president. His opponents say he stole the February 2023 polls.

He has not been shy to take hard decisions though. He drove subdued hysteria in the country when he pronounced the end of petrol subsidy.

Two weeks after, the Central Bank of Nigeria announced an end to the segmented foreign exchange regime that had led to unprecedented exchange rate distortions and had helped to stymie investments.

Under Tinubu’s predecessor, FX management remained too rigid to respond to external shocks.

The World Bank, in its Nigeria Development Update (June 2022) report, warned that “multiple exchange rates, trade restrictions, and financing of the public deficit by the Central Bank of Nigeria (CBN) continue to undermine the business environment. These policies augment long-standing weaknesses in revenue mobilisation, foreign investment, human capital development, infrastructure investment, and governance”.

Tinubu said he decided to unify the official and parallel market rates to save the country from financial haemorrhage.

The President, within two weeks, also signed four consequential bills into law, including the Student Loan Act that will facilitate the provision of financial assistance to Nigerian students in tertiary institutions.

The legislation allows students to access interest-free loans from the Nigerian Education Loan Fund.

The federal government said it was working out modalities to begin the disbursement of the loans from September.

Tinubu last week signed four Executive Orders, including one that suspends the 2023 Finance Act, deferring the date of its commencement from May 28, 2023 to September 1,2023.

The Customs, Excise Tariff (Variation) Amendment Order, 2023, shifts the commencement date of the tax changes from March 27, 2023 to August 1, 2023 and also in line with the National Tax Policy.

Another Executive Order suspended the 5 percent excise tax on telecommunication services as well as the excise duties escalation on locally manufactured products.

The President ordered the suspension of the newly introduced Green Tax by way of excise tax on single use plastics, including plastic containers and bottles, as well as the import tax adjustment levy on certain vehicles.

The leadership and operational style of Tinubu and his predecessor are remarkably different.

Buhari ran the country’s economy aground. Tinubu has yet to change the narrative, although he has unveiled a rash of policies and initiatives.

Nigeria’s economic woes continue to worsen. The local currency has continued to fall steeply. The naira lost about five percent of its value within 24 hours from the 664.04 per dollar recorded at the close of business the day the CBN allowed for a free float of the local currency against the dollar and other global currencies.

Steve Hanke, professor of Economics at Johns Hopkins University in Baltimore termed the naira “another central bank junk currency”.

Read also: Mr. President; beware of Buhari’s failures!

Nigeria continues to face massive development challenges, including the need to reduce the dependence on oil for exports and revenues, diversify its foreign exchange sources, close the infrastructure gap, build strong and effective institutions, as well as address governance issues and strengthen public financial management systems.

The implementation of critical macroeconomic and structural policy reforms by Tinubu’s administration has the capacity to place the economy on a stronger and more sustainable path.

Eliminating the petrol subsidy early in his administration and unifying the country’s exchange rate are steps that have stoked foreign investors’ interest in the country.

For Nigeria’s new president to define himself as different from his predecessor, he would need to start showing results – results that include new and massive private-sector jobs, growing income for the middle class and strong GDP growth.