• Saturday, April 20, 2024
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Tinubu needs to devote quality time to reviving Nigeria’s wobbling economy

Tinubu needs to devote quality time to reviving Nigeria’s wobbling economy

First for the not so bad news! On the day he was sworn in as president, Bola Tinubu displayed the courage needed to end the corrupt petrol subsidy when he said, “fuel subsidy is gone.” He followed with the hint that the then multiple exchange rates will be collapsed. The courage of that audacious pronouncement has not been followed by the sacrifice required. And now, however, we do not know if to believe him when he says that Nigerians should expect the economy to grow by more than six per cent during his time as president. If nothing, he has so far failed to lay before the people, a clear, joined up and tested plan capable of turning around the economy he met tottering.

Read also: Tinubu touches down in Berlin for G20 Compact with Africa conference

Worryingly, it is almost nine months since the election and six months since Tinubu’s government was inaugurated. The impression is growing that people heard more about Tinubu’s plans for economic revival before he was sworn in. Since the euphoria of his appointment, it has been quiet. What ever happened to those much-talked about plans to rebut the comatose oil industry that used to be the mainstay of the Nigerian economy?

Simply put, Tinubu and his government need to inspire Nigerians by demonstrating that he cares and knows precisely what to do about improving their fortunes. If the president needs any reminder, the pain in the land is widespread. The hopelessness is at levels never before experienced. Nigeria is in dire straits, but you do not notice this in government.

According to data from the government’s budget office, the aggregate expenditure for FY 2023 is estimated at N21.83 trillion, with a prorata spending target of N12.29 trillion at end of July. The actual spending was N8.60 trillion and of this amount, N3.94 trillion was for debt service, and N2.68 trillion for Personnel costs, including Pensions. Only about N857.08 billion (25 percent of the pro-rata budget) has been released for MDAs’ capital expenditure as of July 2023.

The document also shows how the significance of crude oil and gas production in the Nigerian economy has reduced significantly in recent times. “The contribution of the sector to the real GDP declined from 8.78 percent in 2019 to 8.16 percent in 2020, 7.24 percent in 2021, and 5.67 percent in 2022.

“From 1.81 million barrels a day (mbpd) in 2016, average crude oil and condensate production (net of incremental production for Repayment Arrears) peaked at 2.09 mbpd in 2018 but declined continuously thereafter to 1.7 mbpd in 2020 and 1.28 mbpd in 2022. Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) shows that an average of only 1.37 mbpd of crude oil was produced between January and July 2023.

Read also: APC chieftain lauds Tinubu move against electricity tariff hike

Last year, the Federal government through the National Bureau of Statistics (NBS) announced the results of the 2022 Multidimensional Poverty Index (MPI) Survey which was a collaborative effort between the NBS, the National Social Safety-Nets Coordinating Office (NASSCO), the United Nations Development Programme (UNDP), the United Nations Children’s Fund (UNICEF), and the Oxford Poverty and Human Development Initiative (OPHI). The survey, which sampled over 56,000 households across the 36 states of the Federation and the FCT, revealed that:

· 63 percent of persons living within Nigeria (133 million people) are multidimensionally poor.

· The National MPI is 0.257, indicating that poor people in Nigeria experience just over one-quarter of all possible deprivations.

· 65 percent of the poor (86 million people) live in the North, while 35 percent (nearly 47 million) live in the South. Poverty levels across States vary significantly, with the incidence of multidimensional poverty ranging from a low of 27 percent in Ondo to a high of 91 percent in Sokoto.

· Over half of the population of Nigeria are multidimensionally poor and cook with dung, wood or charcoal, rather than cleaner energy. High deprivations are also apparent nationally in sanitation, time to healthcare, food insecurity, and housing.

This week, the Economist Intelligence Unit, EIU published its Africa outlook for 2024 in which it said 12 African countries will be among the 20 top fastest growing economies in the world and Nigeria does not show up in the impressive list. So, there is good reason to be worried if you are a Nigerian living at home. Oil production is at levels attained in 1992 and Nigeria’s oil industry ranks among the worst managed around the world. NNPC should be the fuel driving economic growth, but the state-owned oil company is falling behind in virtually all the abysmally low targets that the company set for itself.

Nigeria’s economy has been wrecked by oil theft which NNPC has been grossly inefficient in curbing and the resultant effect is that for the first time, Nigeria is unable to meet its OPEC quota at the time of high oil prices. Also, the country cannot meet obligations for gas delivery under the Liquefied Natural Gas commitments. All of this helps to worsen the fiscal and acute dollar shortage that are enough to overwhelm.

The raging inflation in Nigeria ensures that in four years the pay of an average Nigeria is reduced to zero. The Tinubu administration has so far failed to show what it seeks to do with the nation’s decrepit power sector which generates no more than 4200MW into the national grid. The manufacturing sector is bedevilled by a debilitating foreign exchange shortage. This is in addition to the age long challenges of bad roads and the logistic nightmares that doing business in Nigeria entails. The nation’s judiciary is in a total mess and the corruption in it has become the subject of salacious Nollywood films. Tinubu has kept mute about the intense desire of Nigerians for both political and fiscal restructuring of Nigeria. The people are yet to hear what he desires to do with the Oronsaye committee report which sets out a clear roadmap for enhancing efficiency in government and cutting costs.

Read also: Tinubu racing to beat Buhari records, as promised

According to Segun Aganga, a former finance minister, Nigeria’s economic institutions and agencies must be held accountable: nations fail because institutions are weak or do not exist. Any industrial plan will fail if the relevant economic institutions are weak. Government agencies are economic institutions and the implementing arm of the Ministries and are therefore critical to any economic diversification plan. At a minimum, competent technocrats or even competent politicians who have a reputation for delivering should be appointed to the boards and management of these agencies. The dividends of democracy as said earlier should not be about sharing positions to party loyalists but should be about good governance. KPIs should be set, and a comprehensive review of their performance regularly undertaken before any reappointments.

Tinubu and his government need more firepower in government via the infusion of a crop of young men and women with international exposure and who are knowledgeable in crucial subjects of nation building, smart, and result oriented with the discipline to execute. They should be drawn from far and near, from home and from across the world, brought together for the huge task ahead of Nigeria.

This is not a job for the boys as we have seen largely in the last six months. Talents to be admired for their agility and for their knack to zero in and crack water out of stone are required. Also, a national revival council that the president mandates and monitors closely for delivery. So far, this is missing.

Read also: Sell off dead assets to raise funds, Aigbogun tells Tinubu

“I am here to serve Malawians. And to do so, I am prepared to do things that are painful as long as they are the right things. The most painful thing by far has been the recent devaluation of our currency, the kwacha, to correct the false value based on nothing and rebuild true value in the kwacha based on production and exports. I know that this decision has caused a lot of pain and I also know that all of us now have to make big adjustments in spending so that we can prioritize those areas that are most productive and stay the course until our economy becomes productive and profitable again. In making those adjustments, I myself have to live by example. This is why effective immediately, all of my international trips between now and the end of the fiscal year beginning with my trip to COP28 at the end of this month are cancelled. By extension I am putting a freeze on all publicly funded international trips for all public officers at all levels.” – President Lazarus Chakwera of Malawi.