What Tinubu’s presidency means for the economy
Amid double-digit inflation and crippling cash shortage, there is a growing list of expectations for President-elect Bola Tinubu as he attempts to find a new path for an economy in turmoil.
Tinubu has promised he will build on President Muhammadu Buhari’s public infrastructure programme to create jobs and remove legal limits on government spending.
His supporters point to Lagos’ successes and insist he can replicate them on a national scale. Lagos is one of the most viable economies in Nigeria; if was a country, it would be among Africa’s top 10 economies by gross domestic product (GDP), according to The Economists.
His critics say growth has come with notorious traffic gridlock and repeated flooding while multiple slums have also suffered from gentrification with little or no compensation for those affected.
Here is what Tinubu’s administration could mean.
One of the central planks upon which the campaign of Tinubu rested was his impressive revenue credential, which he earned when he was governor of Lagos State between 1999 and 2007.
He has continued to boast of growing Lagos’ internally generated revenue from “a paltry N600 million monthly, which has now grown to N51 billion.”
Chinwe Egwim, chief economist at Coronation Merchant Bank, predicted a potential rise in public-private partnerships in a bid to achieve some of the plans across Tinubu’s priority sectors.
“Sector focus areas for the Tinubu’s administration collectively accounted for 62 percent of total GDP in 2022,” Egwim said.
Analysts said having secured victory at the poll, the onus is on him to unveil his plans to redeem Nigeria from its current revenue challenges.
“Under Tinubu’s administration, Nigeria’s path to economic prosperity may lie in prioritising equity financing over debt,” Ayo Teriba, the CEO of Economic Associates, said at a virtual event titled ‘How 2023 election will reshape Nigeria’s future’.
Crude oil theft is the biggest headache for oil companies, which have seen production tumble. Oil majors are selling shallow-water projects, mainly due to the theft and vandalism of pipelines, and shifting to the offshore space.
During his campaigns, Tinubu promised to ensure maximum technology deployment to curtail oil theft in the polity.
Speaking during a town hall meeting with the organised labour, last December, he said he would introduce measures to monitor, protect pipelines and block theft of oil resources in the country.
Tinubu also condemned those receiving stolen crude, saying there won’t be a supplier if there is no receiver.
He also said his administration would have a zero-tolerance for corruption by strengthening anti-corruption agencies.
On what to do with the issue of fuel subsidy, Tinubu said the popular scheme, which cost $10 billion last year and is driving up debt, will be phased out and the money channelled to infrastructure, agricultural and social welfare programmes.
Read also: Market outlook hangs on Tinubu’s reforms
“I believe we must remove petrol subsidy immediately. It has outlived its shelf life as a public good. We will neither subsidise neighbouring countries’ fuel consumption nor allow a select few to reap windfall profits and hoard products,” Tinubu said at an event organised by the Nigeria Economic Summit Group.
The Centre for the Promotion of Private Enterprise (CPPE) believes the Tinubu administration will walk the talk of removing petrol subsidies.
“A substantive minister of petroleum resources should be appointed to promote professionalism and transparency in the sector. The practice of the president assuming the role of Minister of Petroleum should be discontinued,” CPPE said.
Naira redesign/cash withdrawal limit
At the height of the country’s current cash crisis, Tinubu said the withdrawal policy was implemented to thwart his presidential ambition.
Some of his close associates had said the policy would be reversed once Tinubu won the presidency. Tinubu also promised to deal with the challenge of multiple foreign exchange rates if elected President.
“Government should eliminate foreign exchange subsidies to unlock a minimum of N3 trillion in revenue annually from the sale of CBN forex to the official foreign exchange window,” CPPE said.