Former Vice President Atiku Abubakar has mentioned a comprehensive review of the 2024 budget among six things that President Bola Tinubu must do to get the economy back on track undertake. He said the budget needs to be reviewed within the new reform framework, “prioritise fiscal measures to deal with an unprecedented rise in commodity prices; and ease existing restrictions on selected food imports.
Abubakar lampooned the administration of President Bola Tinubu, for failing to address several economic challenges in the country.
Henoted that rather than tackle the challenges, the government has introduced policies that exacerbated Nigeria’s microeconomic instability.
Atiku Abubakar who was the Presidential candidate of the main opposition Peoples Democratic Party (PDP), in the 2023 election, berated the Tinubu administration for laying “out no plans for the ‘remodeling’ of the economy”, before embarking on his “cocktail of policies”.
Atiku, labelled President Tinubu’s policy as misadventures, listing them to include the elimination of petrol subsidies, the implementation of a new foreign exchange policy that unified the multiple official FX windows into a single official market, tighten monetary policy to reduce naira liquidity, hiked the monetary policy rates, cost-reflective electricity tariff and cybersecurity tax.
In his assessment of Tinubu’s policies, the former Vice President noted that “12 months on, Tinubu’s pledge of growing the economy and ending misery remains unfulfilled. His actions or inactions have significantly worsened Nigeria’s macroeconomic stability.
“ Nigeria remains a struggling economy and is more fragile today than it was a year ago. Indeed, all the economic ills – joblessness, poverty, and misery – which defined the Buhari-led administration have only exacerbated,” Abubakar said.
“Africa’s leading economy has slipped to the 4th position lagging behind Algeria, Egypt, and South Africa. Citizens’ hopes have been dashed (and not renewed contrary to the propaganda of the administration) as Nigeria’s economic woes have multiplied.”
The former vice president said Tinubu’s policies do not create prosperity. Instead, they pauperize the poor and bankrupt the rich.
“They spare no one,” he said.
He also noted that majority of Nigerians, especially those who are poor, are going through the worst cost-of-living crisis since the infamous structural adjustment programme of the 1980s.
The PDP flag-bearer during the 2023 election said: “The annual inflation rate at 33.69% is the highest in nearly 3 decades. Food prices are unbearably higher than what ordinary citizens can afford as food inflation soared to 40.53% in April, the highest in more than 15 years.
He also noted that Nigerians now pay 114% more for a bag of rice, 107% more for a bag of flour, and 150% more in transport fares relative to May 2023.
“Today, in some locations, motorists are paying 305% more for a litre of fuel. Yet, on a minimum wage of the equivalent of US$23 per month, Nigerian workers are among the lowest wage earners in the world.
“President Tinubu’s policies create a hostile environment for businesses with the manufacturing sector, which holds the key to higher incomes, jobs, and economic growth, now bogged down by rising input prices, higher energy and borrowing costs, and exchange rate complexities.
“For example, since 2023, the average price of diesel has doubled to N1,600 per litre. Electricity tariff has recently been increased by 250% from N68/Kwh to N206/Kwh. As reported by the Guardian (13 May 2024), in Q1 of 2024, energy prices were up by 70%, costing manufacturers N290 billion.
“Since May 2023, corporate Nigeria has lost more than a dozen enterprises to other countries. Unilever, GlaxoSmithKline (GSK), Procter & Gamble (P&G), Sanofi-Aventi Nigeria, Bolt Food, Equinor, among others had exited Nigeria citing reasons including foreign exchange complexities, security concerns, and high operational costs.
“According to the Nigeria Employers’ Consultative Association (NECA), nearly 20,000 jobs may have been lost due to the departure of 15 multinational companies from Nigeria.”
Atiku also noted that in an economy with high rates of unemployment, a declining manufacturing sector cannot be an option.
Atiku while also assessing the President’s foreign exchange policies, noted that the policies have not had any positive impact on Nigeria’s foreign trade balance, contrary to policy expectations.
“In particular, the free-float and the resulting devaluation of the Naira has not resulted in an appreciable improvement in Nigeria’s trade balance.
He stated that the devaluation of the Naira, which has seen the currency fall to N1500/$ has not enhanced the competitiveness of local producers nor positive impact on exports of goods, primary or manufactured.
“In Q4 of 2023, for example, while imports surged 163.1%, exports rose at a slower 99.6%, indicating a huge foreign trade deficit. Similarly, in Q1 of 2024, Nigeria recorded a trade deficit of $7.5 billion, with exports value of $12.7 billion and import value of US$14 billion. Overall, the trade deficit as a percentage of GDP increased by 0.83% from 0.05% in May 2023 to 0.88% in May 2024.”
Despite all the audio announcements, Atiku noted that President Tinubu’s policies failed to attract the much needed foreign investments into the country “despite all the posturing and media hype by the President’s men”
According to him, “ Exchange rate unification and free float of the Naira have not led to higher capital inflows (whether Foreign Direct Investment or Foreign Portfolio Investments), again contrary to policy expectations. Indeed, FDI inflows declined by 26.8%, from US5.33 billion in May 2023 to US$3.9 billion in May 2024.
“It is not difficult to understand why: FDI is about TRUST. It is about the investing world trusting the leadership of a country to act and deliver on promises made. Investors come when the right policies are designed and delivered timely and efficiently by public institutions”
Atiku who noted that “Time is running out for the government”, listed six steps the Tinubu administration must act on fast, to save the economy.
He stated that the President must undertake a comprehensive review of the 2024 budget within the new reform framework, to “prioritise fiscal measures to deal with an unprecedented rise in commodity prices; and ease existing restrictions on selected food imports
He said the Tinubu government must undertake a comprehensive review of the Social Investment Programme (SIP) to mitigate some of the impact of these policies on the most vulnerable households.
“The SIP must go beyond Conditional Cash Transfers to include programmes that prioritize support to MSEs across all the economic sectors, as they offer the greatest opportunities for achieving inclusive growth. In addition, a holistic programme to support medium and large-scale enterprises to navigate the stormy seas in the aftermath of the withdrawal of subsidy on PMS is also needed.
Atiku also tasked the Tinubu’s administration to urgently tackle security headlong.
“President Tinubu, as a matter of priority, needs to rejig the nation’s security architecture as what is currently in place is not serving the needs of the people. The state of pervasive insecurity continues to adversely impact agricultural production and the value it brings to the economy, especially in the Northern parts of the country. Insecurity resulting from terrorism, banditry, kidnapping, and cattle rustling has compelled many crop farmers and pastoralists to abandon their lands and relocate to the neighbouring countries of Niger, Chad, and Cameroun.
“This has drastically caused a reduction in the production of food and skyrocketed prices of foodstuffs. Food scarcity in Nigeria is so dire that a report by Cadre Harmonize warns that between June and August this year, about 31.5 million Nigerians may face severe food shortages and scarcity.”
