Tinubu’s reforms brought stability, confidence to the market – Oyedele

Nigeria would have experienced an “economic meltdown” if not for a raft of reforms implemented by President Bola Tinubu some 18 months ago, according to Taiwo Oyedele, head of the Presidential Fiscal Policy and Tax Reforms Committee.

Oyedele stated that the reforms – scrapping fuel subsidy and unifying the exchange rate – though painful, had brought in the needed stability and confidence into the market.

“The structural reforms have brought in stability and market confidence. The indicators are the short-term foreign portfolio investment (FPI).

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“FDI signifies a long-term confidence,” the tax chief said at an economic outlook section organised by the Covenant Nation, Saturday.

Data obtained from the National Bureau of Statistics (NBS) showed that FPI was the highest capital imported into the country last year.

It stood at $1.4 billion in the second quarter of 2024 before it dropped by 35.9 percent to $899.3 million in the third quarter.

Meanwhile, foreign direct investment (FDI) had a staggering $103.82 million in the months through September, 2024, highlighting investors cautious sentiments for long term investment.

Oyedele argued that Nigeria was living an artificial life in the pre-reform era as subsidies were gulping government’s dwindling revenue, a situation that didn’t give a true representation of the country.

“Our Nigeria was a country where we’re living in window dress realities. If you look back to about two years ago, the naira exchange rate was N450/750 to a USD depending on who you ask. But was that really the exchange rate? Petrol prices were under N200. But was it really under N200?” he questioned.

The tax expert made clear that there’s nothing wrong with running subsidies provided that the country can afford it, stating very clearly that “Nigeria lived artificially better than it was.”

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He further stated that as a result of low revenues and high subsidies, the fiscal deficit was rising, culminating into Nigeria spending 96 percent of its revenue to service debt.

“Nigeria used all its revenue to service debts. We were not paying debts back; we were just servicing them.”

This heavy reliance on borrowing, he warned, had brought the country to the brink of economic collapse, citing the situations in Sri Lanka and Venezuela.

He also decried the era where Nigeria was glued to ways and means to run its economy, printing excessive money that resulted in widespread inflationary pressures and consequent weakening of the naira.

“We printed close to N40 trillion, plus interest. And we were surprised there was inflation. Nigerians don’t realise that the invisible controls the visible. The removal of subsidies is not something you can see physically—it is not tangible.”

Oyedele was however optimistic that Nigeria is already turning the corner, maintaining that the economy is positioned for growth and development should the reforms be allowed to take its course.

“I personally believe, and this is based on data that the worst is behind us and it can only get better going forward.”