In October 2023, I authored a widely circulated article wherein I descended on the Nigerian President, Bola Ahmed Tinubu over the embarrassing state of the country’s economy. I lampooned the President, among other things, over the haemorrhaging fall of naira and the rising cost of food items in the most populous Black Country in the world.
However, with the current economic challenges and hardship plaguing Nigerians increasingly at an alarming rate, particularly, the hike in the cost of goods and services, it is important to provide an unbiased perspective and the underlying complexities of the situation.
After the removal of the fuel subsidy by President Tinubu immediately after his inauguration on May 29th, 2023, the country has been on a roller-coaster of various economic challenges. This important action demands scrutiny, and also some recognition for the intended efforts – eradicating the systematic issues that had plagued Nigeria for decades.
Firstly, it’s essential to acknowledge that Nigeria’s economic woes are not unique. Sovereign nations worldwide, including the United Kingdom (UK) and Japan, two of the mightiest economies, are grappling with recessionary pressures and rising costs. Even the almighty UK fell into recession in the last quarter of 2023, and is still battling with a shrinking economy.
The major difference that sets Nigeria apart is the lack of basic infrastructures, crucial for economic development. Roads, electricity, water, and education are fundamental pillars for any thriving society, and their absence in Nigeria has constituted to our belief of every country’s economy being better than ours. But again, Nigeria’s under-development is a constant menace that has been deterring the growth for decades, even before Tinubu’s ascension as the President.
A critical aspect often overlooked is the endemic corruption that has permeated Nigerian governance since independence. Every past administration, including the People’s Democratic Party (PDP) and the Buhari led administrations have been characterised by instances of mismanagement and squandering of trillions of naira on failed projects without mercy.
The Nigeria Air project which consumed N85 billion under the Buhari government, according to Business Day, yielded no result. The Ajaokuta steel project in Kogi state which gulped $400million under the Buhari led administration, and many others, remains a testament to the negligence of previous administrations. Olu Agunloye, the Power Minister under the Obasanjo led administration was recently brought into court in Abuja, the Federal Capital Territory (FCT) over his mismanagement of the $5.4billion Mambilla power project funds. Many of these projects would have contributed to the development of the country’s economy; rather the allocated funds were either embezzled or squandered.
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The Buhari administration has faced issues with foreign reserve mismanagement, multiple exchange rates, and fund allocation. Nigeria’s debt has reached N53 trillion in eight years, despite printing trillions of naira to sustain the economy. The government must take bold action to reduce the debt profile, such as floating the naira, despite potential short-term challenges.
Tinubu’s administration’s policies on importation, which have caused controversy, could potentially transform Nigeria’s economy. The abandonment of agriculture for crude oil has led to the collapse of the naira and overreliance on imports. Nigeria’s consuming economy has turned it into a dumping ground for foreign goods.
Nigeria’s dependence on importation has led to unfavourable trade balances, terms, and policies, resulting in the closure of local industries like Errand Products and Technoflex Company Limited. To achieve economic growth and global market competitiveness, Nigeria must support local production, internal development, and favourable importation policies.
The issue of fuel subsidy removal, which has constantly pitched Nigerians on edge against President Tinubu’s administration, is a massive force that triggered the down-spiralling of the economy. However, this would have been the case with or without President Tinubu’s emergence as Nigeria’s president. During the 2023 presidential election, major candidates like Atiku Abubakar and Peter Obi spearheaded their campaigns with the promise of fuel subsidy removal as a way to curb corruption disguised as subsidy.
While subsidy removal may initially cause discomfort, it also poses its advantages for the nation, leading to increased FAAC allocation for state and local governments and enhancing development at the state level, which is closer to the grassroots government.
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It takes courage to drive substantive change in the face of entrenched interests and systemic challenges. Bola Ahmed Tinubu’s government, while not immune to criticism, has displayed a willingness to confront these issues head-on. Floating the naira is a necessary step towards a more sustainable economic future, laying the foundation for long-term prosperity. While the road ahead may be daunting and difficult, it is imperative that we acknowledge and support bold initiatives aimed at steering Nigeria’s future towards economic stability and growth.
Maxwell Adeleye, a Communication-for-Development Expert, sent this piece from London, United Kingdom (UK). He can be reached via [email protected]
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