Nigeria in desperate moments as FG struggles to tame delinquent economy

…Citizens’ patience running thin

The Federal Government appears to be under intense pressure to steady a delinquent economy.

The administration of President Bola Ahmed Tinubu is being pummeled on a daily basis by angry Nigerians, who speak out of frustration arising from intense hunger and deprivation.

Read also: Tinubu’s reforms under spotlight as economic hardship worsens

Many Nigerians are daily losing faith in the government, a situation that has put Abuja under pressure to put things in their proper place.

Although the government at the centre has not been idle, the refrain is that its best so far is not good enough for the country. The verdict appears to be keeping the administration uncomfortable.

Observers say that the government seems to be clawing at anything that offers hope.

The efforts of the government has resulted in improved crude oil production, which today stands at almost 1.5 million barrels per day against an average production of 1.335 million barrels per day in 2023.

While that stability is laudable with sustainable improvement expected, the mono-economy is still troubled.

It is obvious that with a biting inflation, continuous free fall of the Naira, the highest food inflation in the history of the country, very low purchasing power, growing unemployment and insecurity rates, the African giant is truly in a bad shape.

The present administration has been making efforts at stabilizing the economy, which became more troubled since May 29, 2023.

From foreign exchange liberalisation, subsidy removal, now reversed, to other policies and measures of the economic reforms of the Bola Tinubu-led government, there have been attempts to save the economy.

With the worsening economic realities, the efforts being made by the government seem to have less impact so far as many criticize the policies, saying they are not good enough or dead-on arrival.

The collapsing of the multiple foreign exchange rates did not impact the economy as expected and fuel subsidy has since returned through the back door- these were contrary to the government’s initial calculations. The seeming negative outcomes of the policies so far appear to have put Abuja under pressure.

But it is also making efforts in that respect and one of such moves is the Economic Advisory Committee set up in February by President Bola Ahmed Tinubu.

At the inauguration of the committee, which comprised representatives of the federal government, states and the organised private sector, the President was clear on the mandate.

The goal, according to him, is to provide additional efforts in stabilising the economy and ensuring the best economic future for Nigerians.

To do that, the President further charged them: “Let’s look at what we are doing right and what we are doing wrong to bring life back to the economy. As I have said many times, the people of this country are only the people we have to please.”

Segun Ajayi-Kadir, director-general, Manufacturers Association of Nigeria, a member of the committee, also affirmed that the private sector will play a very significant role in promulgating workable recommendations to the President on economic matters.

But looking at some of the members of the committee, especially from the organised private sector, some observers fear that they will not represent the interest of the masses as they are business people, capitalists and profit-minded to say the least.

“The billionaire businessmen who are in that committee will prioritise their business interests over the welfare of the poor masses. We need good economists and consumer-centric business owners in the committee and not even the likes of Chukwuma Soludo, because he has crossed over to the elite club and will not see things the way he used to see them before becoming a governor,” Onyewuchi Akagbule, a senior lecturer at Nnamdi Azikiwe University Awka.

Speaking further, the lecturer noted that the hunger in the land requires both immediate and long-term solutions, but does not see monopolistic business owners, bankers who are after declaring huge profit and position-seeking government representatives leading charge in people’s welfare this time.

“President Tinubu has done well in setting up the Economic Advisory Committee, but if the wrong people are there, the advice will not favour the vulnerable people who Mr. President wants to protect. We need Nigerians who feel the pains of the masses and not those who reap from the pains,” he noted.

Julie Gomwok, a serial entrepreneur, called for review of the committee members to include businesses that are truly been impacted by the current situation in the country.

“I run different SMEs and some are likely going to shut down if forex rate and diesel price continue to increase. 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,” the ex-banker noted.

Another effort to save the economy, which Sam Onikoyi, a Nigerian academic, thinks will really cut the huge cost of running the government, curb looting, corruption and boost Nigeria’s lean treasury is the implementation of the Stephen Oronsaye Report.

According to him, billions are spent yearly in running multiple agencies that perform same duties by selfish politicians and corruption government officials, hence, collapsing or merging them will save the country from huge cost and boost the lean treasury.

“Imagine the billions of Naira the country will save from slashing the current 263 statutory agencies in the Federal Civil Service to 161, scrapping 38 agencies, merging 52 others and reverting 14 others to departments in various ministries among others.

“If President Tinubu can truly implement the recommendations of the 800-page Oronsaye Report, the economy will breathe again because the economy is bleeding heavily from the wastages and looting in these agencies,” Onikoyi said.

In his view, Akagbule said that the many agencies are official conduit pipes for embezzlement and also the over 700 local government areas in the country that only open their offices at the end of the month to share federation government allocation.

To complement the Stephen Oronsaye Report implementation, Akagbule insisted that the Presidency should also lead by example by cutting down on its huge and unexplainable expenses, as well as the members of the National Assembly, governors and all government appointees, especially now that the economy is bleeding.

While the implementation committee was given 12 weeks to submit its report, some observers think that 12 weeks is long considering the fact that Nigerians need immediate action and again, the approval for the implementation of the report is coming 12 years after the panel submitted its report.

As part of the efforts at addressing the economic hardship, particularly the escalating cost of living, recently, Wale Edun, Minister of Finance and Coordinating Minister for the Economy, hinted that the Federal Government would restart direct cash transfers to 12 million Nigerians households, up from the initial three million households.

“We know that there is 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.

But many are frowning at the plan as palliative to the economic hardship due its many lapses and negative impact on the economy, especially in the current inflationary environment.

Though the current hardship requires immediate action to save the most vulnerable Nigerians, Gomwok noted that the plan to restart direct cash transfers would not save the situation as seen with the sharing of the fuel subsidy palliatives.

Instead, the proposed fund transfer initiative by the Federal Government to 12 million Nigerian households, according to her, can save more SMEs from collapsing, help them create more jobs and employ some of the vulnerable people who will earn salaries rather than depending on government stipend.

Leke Fadahunsi, an economist and confectionary business owner, decried that the three million households the initiative claimed to have impacted are still hungry today and the government now plans to increase the number to 12 million households.

“This is not the way to address the escalating cost of living issue. It will negatively impact the economy. Brazil, where we copied the initiative from, had many levels of checks, documentations, easy identification system and no religion or ethnicity challenges. So, who do you give when more people are sliding into poverty every day, it is better to get the economy working to enable private sector to boom and create more jobs than sharing money to people. It will boost inflation, make Nigerians lazy and worsen the situation,” Fadahunsi noted.

However, he noted that one big thing the Federal Government needs to do now is to stable foreign exchange rate, which he insisted is possible if the government is serious about it.

“What we have is artificial forex scarcity and the government knows that. If the Central Bank and the Federal Government are decisive on the forex policy, things will change, people will not store dollars and the roadside bureau de change will not determine how much dollar will sell. Government should step on toes and deal with the enemies of our economic recovery if we want true change. Bring dollar down and the price of other things will come down, even sachet water,” he concluded.

Akagbule believes the same. He noted that stabilising forex and a strong Naira will force down prices of goods, especially food items for the most vulnerable Nigerians.

Moghalu faults implementation of Tinubu’s economic reforms

Kingsley Moghalu, a former deputy governor of the Central Bank of Nigeria (CBN), recently said that the Federal Government was not handling well the economic reforms.

Moghalu, who spoke at the 2023 Leadership Annual Conference and Awards held at the Transcorp Hilton Hotels, Abuja, said that although the removal of the fuel subsidy and floating the naira were right policies, the decisions should have been preceded or complemented immediately by other measures.

“Before the removal of the fuel subsidy by President Bola Tinubu, the administration should have first embarked on some enlightenment programmes on the rationale for it and the associated gains and also put in place compensatory succour for the people, particularly in the transportation sector because the moment you remove oil subsidy where it would hit next is the transport sector,” he said.

Moghalu further said that even though it was right to float the naira to address the foreign exchange issue, the authorities that were to implement and guide this were not in place until months later.

“The CBN Governor was not appointed until about four months later while the Monetary Policy Committee was not in place until last week,” he noted.

He lauded the raising of the interest rate to tighten the naira, saying that what the country was dealing with was cost-push inflation and not demand-pull inflation and as such there was a need for a tightening of naira supply.

“It was a decision late in coming but it’s better late than never,” he said.

Moghalu also criticised the composition of the President’s Economic Advisory Council, which he said was erroneously took for the Economic Team, saying it should have been made of experts in agricultural economics, production economics, development economics, fiscal economics, among others, rather than businessmen and private sector players where conflict of interest could not be ruled out.

Tinubu inherited bigger challenge than anticipated – Onanuga

Bayo Onanuga, special adviser to the President on Information and Strategy, while fielding questions from BusinessDay team recently, said that President Tinubu inherited a much bigger challenge than he had anticipated

“When you are outside, you will not have the full picture of things until you get inside to see what has really happened. I think that was the case. It was when President Bola Tinubu got in there, that he knew the full enormity of the problems. It was then he knew that there was no money to even run the government affairs. You can see that he had to immediately remove the subsidy instead of waiting until June,” he said.

He stressed that although the President had known that there were problems, because the NNPC was already choked up, he never anticipated that it would be that bad.

“Even if he hadn’t removed the subsidy at the time he did, maybe there would have been no fuel in this country in the month of June. So, even though he knew that there were problems already, but it was when he got there that he got the full pictures.

“It was when he wanted to know the actual state of accounts with the NNPC and the CBN, to know where the money is, if there was money at all, that he got the true picture of what was really on ground.

“This was probably because he took over from another APC government. He is very, very reluctant in blaming the previous regime. That is why he kept saying I inherited liabilities and assets. From my own point of view, I will say, he inherited many liabilities.”

Perhaps, also in response to the criticisms of his administration, the President, while addressing leaders of the Afenifere, a pan Yoruba sociopolitical group, at the residence of Reuben Fasoranti in Akure, Ondo State, recently, said he was ready to take responsibility for his actions

“I campaigned for this office to serve Nigeria’s interests, and I was elected. Some said I would not last in the tribunal and came up with all sorts of predictions, but even when in court, I remained focused,” he said.