… Govt has lost the economic momentum – Economist
As the economic crisis continues to bite harder in Nigeria, President Bola Tinubu is coming under intense scrutiny to fulfil his campaign promises nine months after assuming office.
In the last few weeks, President Tinubu’s style of governance and economic policies have been heavily criticised by many Nigerians, even among those who supported his election due to the current high cost of living in the country.
On the streets of Lagos State and across the country the huge euphoria that heralded his administration upon assumption of office in May last year seems to have given way to despair and anger.
Many Nigerians are wondering if the President clearly understands the enormity of the work at hand, others are just agitated and confused on the direction the country is heading, with the prices of goods and service rising on daily bases and beyond their reach.
“The cost of goods and food is becoming unbearable and the government must act now. These days I spend a chunk of my salary feeding my family and little is left for other things.
“I have not seen any effect of Tinubu’s policies, I don’t care about his policies anyway, if this is how we are going to suffer, the man needs to rethink his policies,” Uwa Onoh, IT developer, said.
Observers say the barrage of criticisms of President Tinubu’s policies and programmes from even his staunch supporters and party members is a strong indication that the honeymoon is over and he should begin to deliver on his campaign promises.
Tinubu upon assumption of office wasted no time in implementing a series of reforms aimed at realising the potential of Africa’s largest economy, after a decade-long swing between slowdown and inflation.
They include the elimination of a controversial fuel subsidy, the replacement of the country’s central bank governor, and the removal of the head of the country’s anti-corruption agency among several other reforms.
The measures garnered were welcomed by a large spectrum of Nigerians, but there were those who warned him that there was no plan of fighting the resultant pain it would have on Nigerians.
Since May last year, the subsidy removal, naira devaluation, and the implementation of a value-added tax on diesel imports have led to spikes in the prices of goods and amplifying a cost-of-living crisis in Africa’s biggest economy.
Despite declaring a state of emergency on food security and unveiling an immediate, short and long-term plan for the sector, average food prices of key staples across major cities in the country have surged by almost 100 percent since he assumed office, causing food inflation to rise.
Delays in palliative disbursement and overstretched negotiations with the Nigeria Labour Congress (NLC) heightened Nigerians’ avoidable pains.
Nigeria’s inflation rate climbed to 29.90 per cent in January 2024 from 28.92 per cent recorded in the previous month according to data from the NBS.
Protests broke out in different parts of the country in reaction to the high cost of living with citizens in Niger, Kano, Kogi, Ondo, and other states demanding solutions to the economic crisis.
Last Wednesday, the Northern traditional rulers and the Nigerian Bar Association decried the hardship in the country precipitated by the fuel subsidy removal which had resulted in higher transport costs and food inflation.
Indeed, expectations were higher that the President would put smiles on the faces of Nigerians after eight years of Muhammadu Buhari’s administration, where it was generally agreed that the country retarded based on the result of several indices.
Amid the current unprecedented hardship many Nigerians are beginning to lose confidence in his administration and call for urgent steps to salvage the state of things.
Some Nigerians have even called for the President to step down for a younger person to take over if he doesn’t know what to do.
“My family can’t even afford to eat thrice daily anymore as prices keep soaring every day, the President needs to go round and see the suffering by himself if those around him are not telling him the true state of things,” Shola Oduwole, a secondary school teacher said.
Jhon Umoh, a financial expert said the situation has become unbearable and needs urgent intervention by the President, noting that it had led to rise in social vices.
“You can see that kidnapping, robbery and other social vices are on the rise, people are hungry, the FX crisis is not helping matters. Personally, I have lost confidence in this government; there is nothing they can do”.
Look back on Tinubu’s campaign promises
In the run-off to the 2023 poll, President Tinubu made several campaigns promises during his interaction with Nigerians within and outside the country.
Tinubu’s policy document with the theme: “Renewed Hope: Action Plan for a Better Nigeria,” offered directions on his plans for security, economy, education among others.
On his plans for the economy, Tinubu said he will engage the private sector to drive economic development across the country.
“My belief that the private sector is the fulcrum of economic progress is evident and documented.
“We shall do this on all fronts. We will address the conflict between monetary and fiscal policies. Budgeting will be based on the projected spending levels needed to push real annual growth rate above seven per cent, while reducing the unemployment rate, so that we can double the economy in ten years,” he said.
Besides promising to phase out fuel subsidy, Tinubu also pledged to accelerate full implementation of the Petroleum Industry Act and implement additional favourable policies to attract investment in deep water assets within six months.
On how he would tackle the forex crisis impeding the economy, Tinubu stated in the Renewed Hope document: “The recent dip in our exchange rate is primarily due to global supply and production shortfalls caused by global factors well beyond the scope of our control.
On agriculture, he said his administration would place emphasis on the use of technology to improve the agricultural sector for better production and contribution to the nation’s economy.
According to him, “The Buhari administration has invested heavily in agriculture, providing loans and expanding the country’s total acreage of cultivated land.
“We will build on this, but our focus will be on using technology and expertise to accelerate growth and development by providing the critical infrastructure necessary to achieve the commodity transformations in the agriculture value chain.”
The education sector was not left out as Tinubu said he will provide student loans and reform the Almajiri system in the northern part of the country.
He promised that he would recruit and train more teachers as a way of boosting education; establish technology hubs, where youths can develop technological languages on their own and make a better 21st Century approach to governance in Nigeria.
On how he would tackle insecurity that is ravaging almost all parts of the country, Tinubu said his administration will establish a highly trained and disciplined anti-terrorist squad to tackle the problem.
Economist reacts to Tinubu’s economic policies
Many economists say President Bola Tinubu-led administration lacked a proper economic policy direction and implementation mechanism which has increased Nigerians’ suffering.
The experts noted that the government must get a policy plan to improve the economy and relieve Nigerians from economic induced pains they are presently experiencing.
Muda Yusuf, chief executive officer of the Centre for Promotion of Private Enterprises, said the government needs to engage big players in the food production industry for emergency periods like this and give guarantees to local rice farmers to help check the rising prices of food.
“There are indications of a looming crisis as a result of the rising cost of living, especially with food prices. For instance, the cost of bread and rice are high, including cooking gas,” he said.
Similarly, economist, Kalu Aja, said Tinubu’s government has lost the economic momentum it has with key pronouncements on exchange rate floating and removal of fuel subsidy, with the rescinding of pronouncements.
According to him, “The government has also been struggling with its exchange rate policy despite floating it initially, as naira continues to sustain a downward trend against the dollar, amid dwindling revenue resources from oil and increasing oil theft.
“There was an initial momentum when the government came in with pronouncements on the removal of subsidy on the exchange rate and petrol subsidy. There were lots of recommendations, and the market reacted positively to that.”
He further argued that the government’s delay in palliative distribution after petrol subsidy removal caused many problems, as he also pointed out further loopholes in Nigeria’s exchange rate policy.
“The government slowed down on the palliative, and now the petrol subsidy is back. The exchange rate float didn’t work optimally because the government didn’t do a full float,” he said.
He stressed that the government’s unstable stance on the reforms had affected its plans.
“Currently, the government seems ruthless, with no clear-cut direction, a situation that does not give investors confidence and stability to the economy,” he added.
Many other economists also knocked Tinubu’s administration for its inability to initiate measures to check the pains occasioned by the removal of fuel subsidy.
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