Today marks one year since President Bola Tinubu inherited the world’s toughest job to find a new path for an economy in turmoil.
Tinubu, who secured the weakest mandate of any Nigerian leader since 1999, took the reins of an ailing nation with two recessions in eight years, a nearly two-decade-high inflation rate, poor power supply, rampant insecurity and falling oil production due to crude theft and underinvestment.
At 33.3 percent, the jobless rate soared to the highest in Africa even as the country’s decrepit infrastructure worsened, needing $3 trillion to fix. Leading Nigeria was so tough it prompted a famous quote by a business leader who said “whoever wins the elections loses.”
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Tinubu seemed unfazed however. “Don’t pity me, I asked for the job,” Tinubu said after his narrow victory in the February 28 elections. “I have no reason to underperform as the country’s elected president because I campaigned for the job. I cannot complain about the job.”
In keeping with his pre-election campaign promise to “hit the ground running” if elected president, Tinubu flew out of the blocks after clinching power.
In his inauguration speech in May, he used five words “The fuel subsidy is gone” to scrap a decades-old practice that had cost Nigeria’s treasury $9.7 billion in 2022 alone. Since petrol subsidies were introduced in the 1970s, previous administrations have tried, and failed, to end it.
The impact was immediate. The price of petrol almost tripled to N557 a litre. Bonds rallied. The naira weakened on expectations that exchange rate unification might follow.
Tinubu suspended the controversial CBN governor godwin Emefiele and allowed the apex bank’s new leadership to float the currency. He has also since raised the electricity tariff by 300 percent for consumers on Band A; those who enjoy electricity supply for more than 20 hours a day.
Experts have said the reforms were needed to put Africa’s most populous nation on track but critics said they were hurriedly made without considering its ripple effects on the citizens, especially the vulnerable.
For instance, monetary experts said the floating of the naira should have been preceded by the monetary tightening the apex bank is only just embarking on while measures should have also been put in place to boost the dollar supply.
The removal of the petrol subsidy should also have quickly been followed by palliatives for the vulnerable to cushion the impact of the subsidy removal, according to energy analysts.
“We have a government that has good intentions about what it wants to do to fix the economy, but in the actual delivery, I think they fell short of the expectations that they created,” Adeola Adenikinju, president of the Nigerian Economic Society said.
A recent report by BMI, a fitch solutions company, noted that fuel subsidy reform opens the door to new investment however, domestic price levels fall short of international markets and fuel theft and smuggling remain a drag on government expenditure.
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“Refining margins were squeezed by lower domestic prices, encouraging exports over domestic supply. Profitability in the downstream sector is limited by access to crude from domestic sources,” the report stated.
According to the Institute for Security Studies (ISS), reforms are not meant to plunge the citizens further into poverty or violate the rule of law.
The ISS opined that while Tinubu’s reforms are a step forward in the economic trajectory of the country, there are, however, deep structural issues to be addressed before Nigeria’s economy can deliver prosperity for Nigerians.
Nigerians are bearing the brunt of the poorly planned reforms despite their long-term gains, with inflation peaking at a two-decade high of 33.69 percent. Citizens are scaling down on their expenses, focusing purely on very important areas of their lives.
“Since the increase in fuel prices, my household has stopped using generators to sleep if there is no light because it is no longer affordable,” Emeka Anayo, a foodstuff seller said.
“We now prefer sleeping in darkness. I have to think of how I will fuel my vehicle and also fuel the generator. So, we have to pick the one that is most essential to us, which is fueling the vehicle,” Anayo said.
The cost of a healthy diet rose from N480 in March last year to N982 in March 2024.
Samuel Akinwale, a civil servant with the Lagos State government said “Since the fuel increment, I made drastic adjustments to cut down costs by parking my car for now and using a motorcycle.
“I have also reduced my movement. Before I go anywhere now, it has to be very important. No more unnecessary parties, I now concentrate on the basic needs like food, shelter and my children’s needs too,” he said.
Femi Egbesola, national president of the Association of Small Business Owners of Nigeria (ASBON) said the one-year-old administration of President Tinubu is the toughest for its members in the history of doing business in Nigeria.
“Over two million businesses have died within one year and I am sure that it is even more than that. It’s also a time when many businesses have decided to relocate from Nigeria to other countries, including big businesses,” Egbesola said.
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To tame the pain of economic reforms, Tinubu introduced buses across the states and local governments for mass transit at an affordable rate and invested N100 billion ($80 million) to acquire 3,000 units of 20-seater Compressed Natural Gas (CNG)-fueled buses.
He said participating transport companies would access credit under the facility at nine percent per annum with a 60-monthly repayment period.
Other interventions are the signing of four Executive Orders to address unfriendly fiscal policies and multiple taxes that are stifling the business environment and the funding of 75 enterprises with N75 billion ($60 million) to improve productivity.
There is also Micro, Small and Medium Enterprises funded with N125 billion ($100.8 million) out of which N50 billion ($40 million) would be spent on Conditional Grants to 1 million nano businesses starting from March 2024.
The government also acquired 225,000 metric tonnes of fertiliser, seedlings and other inputs for farmers who are committed to the food security agenda.
The government has floated a legacy programme of consumer credit schemes, student loans as well as social welfare programmes.
“Much of the first year was devoted to corrective reforms which were in many instances also painful, but the reforms were inevitable,” Muda Yusuf, chief executive officer of the Centre for Promotion of Private Enterprises (CPPE), said.
“The administration could do better with regards to the speed of delivering mitigating measures to ease the pains of the reforms,” Yusuf added.
Despite reforms, experts advised Tinubu to upgrade his economic management team, fix crude oil theft, tame rising food inflation and curtail the growing kidnapping business.
In the North-West, reports showed bandits operate freely. Terrorists are still striking with precision in the North-East even as the North-Central states of Plateau and Benue are under a bloody assault from Fulani herdsmen. Bandits brought down a Nigerian Air Force plane in Niger State last August.
South-East, South-South and South-West residents live in perpetual fear of kidnappers, highway robbers, and cult violence.
Global Rights, an international non-government organisation, said 555 Nigerians were killed in Tinubu’s first month in office.
Nigeria is the eighth most terrorised country in the world, the Global Terrorism Index said last March.
