A week to May 29, 2023, the anticipation in the air was that of “relief at last.” Many were already sighing in relief, wondering how they survived Buhari’s eight-year-long reign of hardship and some insisted that there would be no government like Buhari’s and so on.
But the reverse seemed to be the case on May 29th, as the suffering for Nigerians continued and even worsened with the proclamation by Bola Ahmed Tinubu, the new president, that “petrol subsidy is gone.”
While that was a bad gift for Nigerians on a presidential inauguration day, it signaled bad days ahead.
Since then, and a year after the inauguration, Nigerians have been struggling to swim out of the murky water with no success as the new administration keeps pressing them further down policy by policy.
Of course, many informed Nigerians, economists and development strategists blame the worsening economic situation in the country on the policies of the new administration, which they said were not well-thought-out, theoretical and poorly conceived with little or no consideration for the already battered masses.
Tough policies, little outcomes
From the failed removal of petrol subsidy, which came back through the back door, the unification of exchange rate, which created artificial scarcity, resulting in the United States of America’s dollar rising uncontrollably to high electricity tariff and high bank interest rates, which scared many entrepreneurs, especially small and medium scale enterprises, which are regarded as the engine room of the economy, the policies are yet to yield results.
“If Mr. President had waited after a few months in the office to remove the subsidy, things would have stabilised a bit and the impact wouldn’t have been this much. The damage was done on his first day in office and since then he and his ‘Renewed Hope’ team have been struggling to fix things with little result,” Magnus Dumbrai, an economist said.
Considering the maladministration of Buhari’s government and where Nigerians were coming from in the eight years reign dotted with growing hardship, Dumbrai said that President Tinubu would have slowed it down at first to have a full grip of things.
“His supporters said that the president has hit the ground running from the first day. But that was with bad policies and in further defence of the policies, they asked for time. We are in a full year now and nothing to impress voters who risked their lives, and the supporters are also suffering with everyone today.
“Say the truth, Nigeria is in a very bad shape today because of the bad policies and somersault of good policies. Those who support poor performance are the true enemies of this country,” Dumbrai decried.
Yakubu Dashi, a Port Harcourt-based petroleum engineer, argued that if the Naira is falling in value because of lack of foreign reserve to defend it, why not do everything possible to make the Port Harcourt Refinery work, at least to save the country the forex used for importation of petrol.
“NNPC said we cannot even meet our OPEC crude oil production quota because of less investment in oil exploration as oil majors are leaving the country. Is there no solution? The government is powerful and can address these challenges and encourage indigenous companies as well.
“If the Army can clear a whole village for killing their own in Niger Delta, they can also clear all oil thieves, bandits and kidnappers. These are the things Nigerians expect President Tinubu to do in order to revive the economy and not trial by error policies,” Dashi said.
Rating the Tinubu’s administration on the effectiveness of its policies, Dashi said that the new administration has not done well for the electorates as the overall essence of a policy is to ensure welfare of the masses.
“Since the fuel subsidy removal prices of commodities have been up, exchange unification is the worst because the dollar has been rising and I don’t see anything stopping it because wicked and selfish Nigerians are taking advantage of the weak policy of the government to hoard dollars and enrich themselves,” he lamented.
For Onyewuchi Akagbule, senior university lecturer, it would be hard to pinpoint what the present administration has done well as the hardship keeps biting harder everyday overshadowing whatever feat they have achieved.
Scoring the government high on palliatives, Akagbule said that it was a timely intervention by the Tinubu administration to assist the most vulnerable people, but that they are hungry again and even more desperate now than before as they cannot afford food again because of the unimaginable food price inflation.
“With the food price inflation resulting in over 500 percent increment on prices of commodities in the last one year, Nigerians are hungry and the number of vulnerable people is increasing.
“Number of school dropouts is on the increase too because education is now out of the reach of more Nigerian families.
“Security is still bad with farmers and villages still being sacked by bandits, kidnappers are bolder now, taking hostage a whole school and being given ransom in billions and more youth are leaving the country. So, what is there to be happy about? Sincerely, all is not well here,” he said sadly.
In the last one year, businesses have not done well too. Pamela Omoigbe, a baker whose bakery shutdown over rising prices of baking materials especially floor, decried that she lost huge investment due to poor sales and rising operation cost occasioned by the bad economy.
“I operated a medium scale bakery on a leased property in Isheri Lagos. I battled with all manner of taxes from the Alimosho Local Government and government agents from Alausa. Our trucks are often stopped by revenue agents, and I must pay my 15 staff members every month.
“But sales have been poor for a long time since the periodic increment of bread price, families cannot afford to buy big quantities of the bigger loaves or medium ones like they used to buy before. So, we struggle to breakeven and I cannot bear it again.
“So, I shutdown on March 25th and called an importer to use the property as a warehouse until the lease period is over. At least, I will make a little money,” she said.
Same also, Wigle Chemicals, a paint manufacturer in Aba, Abia State.
According to Julius Modilim, the CEO, the unstable exchange rate messed his business up as he needed dollars to import chemicals for his production, while decrying the absence of local sources of such chemicals.
“Yes, electricity is now stable in Aba, but we have big challenges sourcing raw materials for our production, especially chemicals. Though the dollar is scarce and the rate is very unstable, if we manage to import, our distributors will be out of business because the people cannot afford the paints.
“I scaled down production in December to cheaper paints, buy plastics for packaging our products from sources we can afford and we now operate with half of our distributors and many staff members have gone because we started owing salaries.
“All the acclaimed palliatives for SMEs from the government did not get to us and those who received them are still struggling because more Nigerians are impoverished today resulting in low purchasing power, many are not building houses today apart from those who make free money or in the oil and gas business,” he lamented.
Julie Gomwok, an Abuja-based serial entrepreneur, faulted the Economic Advisory Committee set up by the president, saying that its impact has not been felt as the economy keeps getting worse every day.
“I run different SMEs and some are likely going to shut down if the forex rate and diesel price increase further. Many small and medium businesses are closing down now and we need them to meet the president and not those who supported his election campaign. The president needs to hear from the downtrodden and not the comfortable,” Gomwok, an ex-banker, noted.
The above cases mirror the many businesses that have shut down in the last one year due to the harsh economy. But the sad realities are that people are losing their investments as these businesses close down, many are out of jobs, some are developing sickness and dying and many families are in distress as the breadwinners lose jobs.
On the part of the government, there has been insistence that the policies are good and need time before yielding the expected results.
Wale Edun, minister of Finance and Coordinating Minister for the Economy, has always urged Nigerians to be patient as the policies are making room for a better tomorrow.
On the efforts of the government at addressing the economic hardship, particularly the escalating cost of living, the Minister of Finance once hinted that the federal government would restart direct cash transfers to 12 million Nigerians households, up from the initial three million households among other initiatives.
“We know that there are about three million beneficiaries now, but given the way the rates have gone, there are probably another 12 million people, households that can benefit from that payment,” the minister said.
He noted that the expansion of the direct cash transfer aims to reach a wider population struggling with the economic situation and to put more money directly in the hands of those who need it most, allowing them to prioritise their needs and alleviate poverty.
Whether implemented or not, the initiative did not even scratch the hardship as inflation keeps taking a toll on the economy every day, so also the students loan scheme, Akagbule observed.
As well, other handlers of the government and the ruling party are insisting that the government is on the right track, which is expected.
However, Gomwok thinks that a way out is for the government to admit that the policies did not work and to restrategise and this time, involving all stakeholders and not politicians and money bags, in formulating working policies.
She called for the review of the members of the Economic Advisory Committee to include businesses that have truly been impacted by the current situation in the country.
Modilim called for the reshuffling of Tinubu’s cabinet as majority of the ministers, according to him, are not living up to the expectations of Nigerians and even Mr. President is not happy that results are not trickling in as he envisaged.
Dumbrai is of the opinion that if Mr. President wants results, he should be bold enough after one year in office to step on toes, especially the cabals of insecurity, at NNPC, crude oil theft, bureau de change and the economy in general.
But the general opinion is that now Dangote Refinery is on, the federal government should supply him with crude oil, and encourage many other private refineries no matter how small to save foreign exchange hitherto used for the importation of petroleum products and boost our foreign reserve.
But so far, it has been one year of an endurance trek in Nigeria with the bruises all over the body of the citizens, showing how tortuous the journey has been.
Economy on downward slope since subsidy removal
Intended to reduce government expenditure and reallocate funds to critical sectors, the subsidy removal has led to a sharp increase in fuel prices, consequently raising transportation and living costs.
The product, which was sold between ₦190 and ₦210 before Tinubu’s government, is currently sold between ₦568 and ₦620 at the official rate.
Many Nigerians, especially those in lower-income brackets, have struggled to cope with these increased expenses.
“Since they removed the fuel subsidy, my income has been cut in half. The cost of fuel is too high, and I have to charge more, but passengers are not willing to pay. It’s a struggle every day,” Adewale, a commercial driver in Lagos laments.
While Nigerians are still battling with the effects of fuel subsidy removal, the Tinubu administration floated the naira. The government’s move to unify the multiple exchange rates was aimed at attracting foreign investment and stabilising the economy. However, this has caused the naira to depreciate significantly, leading to inflation and reducing the purchasing power of ordinary Nigerians.
Cost-of-living crisis/food inflation
At the time of filing this article, the Nigerian currency is traded at N1,485 to one US dollar at the official market. At the parallel market, the naira is traded N1,510 to the US currency.
The latest Consumer Price Index (CPI) report from the National Bureau of Statistics (NBS) indicated that food inflation, which makes up over 50 percent of headline inflation, continued to increase for the 15th consecutive time, reaching 40.53 percent in April compared to 40.01 percent in March.
In addition to food inflation, headline inflation accelerated to 33.69 percent in April, up from 33.20 percent in March.
A medium-sized sliced bread priced at N750 in May 2023, now sold at N1,400. The cost of a piece of egg rose from N100 to N200, and the cost of a crate of eggs rose from N3,500 to N4000 within the same period.
Also, foreign parboiled rice in a 50 kg bag ranges between N75,000 and N80,000, compared to N30,000 to N33,000 in May 2023. Local parboiled rice in a 50 kg bag now sells for N65,000 to N70,000, up from N30,000 before Tinubu’s administration.
A derica of beans has surged from N500 to N1,300, and a 25-litre container of vegetable oil is now priced at N45,000. A paint of garri now priced N4,000 from N1,000 in May 2023.
According to the 2023 State of Food Security and Nutrition World report, the number of Nigerians who are food insecure has increased by 133 percent in three years. It jumped from 63.8 million people between 2014 and 2016 to 148.7 million people between 2020 and 2022.
“Prices of goods have gone up because of the high cost of transportation and inflation. People are buying less, and my profits have dropped significantly. It’s getting harder to make ends meet,” Bisi, a petty trader in Lagos said.
The recent hike in electricity tariff for customers on Band A has further worsened the hardships faced by Nigerians.
Electricity tariff and its burden
In April, the National Electricity Regulatory Commission (NERC) raised the tariff for these consumers from N68 per kilowatt-hour (kWh) to N225/kWh. Although a subsequent reduction in May brought the tariff down to N206.80/kWh, this adjustment has done little to alleviate the financial burden on the affected businesses and households.
This policy change has been implemented amid soaring inflation rates for food and other essential commodities, exacerbating the economic hardships faced by many Nigerians.
Consequently, consumers are grappling with an over 300 percent increase in their electricity costs, prompting widespread discontent and calls for the tariff to be reverted to N68/kWh.
The Tinubu administration, however, insists that it is on the right track and that the current hardships are necessary for long-term stability and growth. Government officials argue that these reforms will ultimately lead to a more sustainable and prosperous Nigeria. They urge citizens to be patient and resilient, promising that the benefits of these policies will become evident in due course.
George Akume, the secretary to the Government of the Federation, said that since Tinubu took office in May 2023, Nigeria has made considerable progress across multiple economic sectors.
During the ‘Ministerial Sectoral Updates’ event in Abuja on Wednesday, Akume highlighted that the government has initiated various policies to reshape the economy.
Akume expressed that under Tinubu’s guidance, the country has seen remarkable progress in its economy during his first year in office.
“It is apt to say that under President Tinubu’s stewardship within his first year in office, we have witnessed significant strides in various sectors of our economy.
“Through prudent fiscal policies and strategic investments, the Nigerian economy has shown resilience and potential for growth,” he said.
He noted that the administration’s emphasis on infrastructure, job creation, and diversifying the economy has set the groundwork for enduring growth and prosperity for all Nigerians.
Moreover, Akume emphasised the government’s dedication to good governance and adherence to the rule of law, which has fortified democratic institutions and improved transparency and accountability in governance.
Akume concluded by urging citizens to actively participate in nation-building, emphasising that it is a collective responsibility, not just that of the government.
“Let us therefore rededicate ourselves to the ideals of unity, peace and progress by working together towards realising the full potential of our great nation,” Akume added.
As Tinubu’s administration marks its first year, the journey has been fraught with challenges. While the government has made strides in certain areas, the immediate socio-economic conditions have been harsh for many Nigerians. The coming years will be critical in determining whether the administration can translate its ambitious reforms into tangible improvements in the lives of the Nigerian people. For now, the endurance trek continues, with hopes pinned on a brighter future ahead.
