Last week, the media was awash with the accounts of the various ministers who reeled out figures of progress made in their respective ministries at the presentation of the scorecard of President Bola Tinubu's one year in office. However, analysts insist that given the current dislocation in the economy and the attendant high cost of living, there is a need to sustain some of the ongoing reforms and seek other ways to put smiles on the faces of Nigerians, writes Festus Akanbi.
As the ovation of the first anniversary of President Bola Tinubu's administration subsided at the weekend, economists and critics of the government said rather than revelling in the modest achievements recorded so far, the time has come to tell Nigerians what the second year would look like.
These are the people who believe that the country's current dangerous economic situation necessitates immediate action by the Tinubu government to safeguard the nation's future.
They are quick to point out that although most of the ministers manning key sectors of the economy have continued to reel out impressive figures to justify their claims that so far so good, the administration has done justice to the nation's challenges, economists said the condition of the Nigerian people is far worse than the situation before May 29, 2023, when the current administration came on board.
Up till today, Nigerians are still talking about the dislocations brought about by the twin policies of fuel subsidy removal and the reforms in the foreign exchange market. Analysts argued that up till now, the problem of insecurity is still crippling farming activities in virtually all the regions of the country while the combined issues of high cost of energy and power, and poor condition of roads are strangulating businesses and pushing the cost of livings beyond the reach of ordinary Nigerians.
Minister of Information and National Orientation, Mohammad Idris, has said President Bola Ahmed Tinubu's first year in office has been a transformative journey towards stability, prosperity and security, guided by the eight-point "Renewed Hope Agenda".
But analysts argued that rather than flaunting data of successes, there is a need for the administration to begin to plot how to continue with some of the reforms put in place and embark on new policies to alleviate the suffering of the people of Nigeria.
There were also calls for the rejig of the cabinet to pave the way for the removal of low-performing ministers if the administration is serious about its resolve to bring finesse to governance.
The Managing Director of Financial Derivatives Limited, Mr. Bismarck Rewane, said the current administration has done relatively well in two critical areas of governance. These are in revenue collection and subsidy management. However, he believed that the Tinubu administration performed poorly in the areas of inflation management and investment growth.
Investment Flow
In setting an agenda for the second year of the administration, Rewane said there is a need for the government to translate the improved revenue generated into the economy by attracting both domestic and foreign investments.
"In the area of inflation management and investment drive, the administration cannot be given a pass mark. "Combining the revenue and expenditure with the necessary impacts on the economy requires a lot of work," he said.
The analyst cautioned against the fixation on foreign investment alone, saying, there is a need to "achieve gross capital formation and to attract domestic investment and foreign investment."
This, he said will impact the growth of the Nigerian economy going further.
He also stressed the need for efficient utilisation of the revenue collected.
Implementing the Reforms in Sequence
On his part, former Vice-President Atiku Abubakar, who was also the presidential candidate of the Peoples Democratic Party (PDP) in the last general election, recommended six economic rescue strategies for the economy under Tinubu.
He said: "It is important that the government understands what reforms must be undertaken and in what sequence. A framework is needed with clearly stated reform objectives and strategies.
"Second, undertake a comprehensive review of the 2024 budget within the new reform framework.
"Third, undertake a comprehensive review of the Social Investment Programme (SIP) to mitigate some of the impacts of these policies on the most vulnerable households. The SIP must go beyond Conditional Cash Transfers to include programmes that prioritise support to MSEs across all economic sectors, as they offer the greatest opportunities for achieving inclusive growth.
"In addition, a holistic programme to support medium and large-scale enterprises to navigate the stormy seas in the aftermath of the withdrawal of subsidy on PMS is also needed."
He added that Tinubu must be cautioned against any attempt to further pauperise the poor by introducing new taxes or increasing tax rates.
He said, "We are aware of the behind-the-scenes attempts to increase the VAT rate from 7.5% to 10%, reintroduce excise on telecommunication, and increase excise rates on a range of goods.
"Fifth, provide clarity on the fuel subsidy regime, including the fiscal commitments and benefits from the fuel subsidy reform and the impact of this on the Federation Accounts. It is curious that since April 2024, fuel queues have mounted at many filling stations across Nigeria, and the infamous 'black market' has sprouted in several states. How much PMS is being imported and distributed, and at what cost? What is the implicit subsidy?
"Tackle security headlong. President Tinubu, as a matter of priority, needs to rejig the nation's security architecture as what is currently in place is not serving the needs of the people. The state of pervasive insecurity continues to adversely impact agricultural production and the value it brings to the economy, especially in the Northern parts of the country."
Another analyst who spoke with our correspondent last week was an economist and Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf. He wanted the current administration to continue with some of the reforms unveiled in the first year in office. He listed reforms in the foreign exchange market, the oil and gas, the power sector, and the one in the agricultural sector.
Sustaining Foreign Exchange Reforms
According to him, "The first is the foreign exchange reform. We don't want to go back to the era of an opaque foreign exchange environment riddled with corruption, that is not transparent and gives many opportunities for round-tripping.
"So what has been achieved in the forex environment needs to be sustained. In the second year, there may be a need to fine-tune some reforms because no reform is perfect. We will continue to fine-tune the reforms in light of our experience and the present realities."
Speaking further, Yusuf stressed the need to modify the reforms to minimise the volatility in the foreign exchange market.
He pointed out that the current level of volatility is too high and that there is a need to define a range with which we can preserve the exchange rates. This range, he said should be sustainable given the level of our reserves.
He stated that another important element has to do with the Customs Duty exchange rate, adding that this issue has been a major problem for many businesses and that there is a need for the CBN, the fiscal authorities, and the Nigerian customs to review it.
"We don't like to see the volatility in the customs duty exchange rate like we are currently witnessing.
"It is making it difficult for businesses to plan. It's making it difficult for people to price their products properly. It's making it difficult even for contractors to present invoices to their clients because it is too uncertain. It also contributes to the high cost of imports due to the high cost of clearing cargo at the ports. These should be reviewed in this second year," he said.
Oil and Gas Sector Reforms
Yusuf listed the oil and gas sector reform as worthy of continuation. He noted that Nigeria has taken a major step by reducing the subsidy on petroleum products, which should be sustained. "We need to situate that within the context of our reality, our social condition, and even the political context because the subsidy removal has led to many dislocations within the economy but was a necessary policy. But again, we need to remodify it because the president has refused to completely remove the subsidy, which is the wise thing to do."
According to him, "The oil and gas sector is still the major source of foreign exchange. Some steps have already been taken to stabilise oil production and to stop oil theft should be sustained in the second year. We need to ensure that we bring more sanity into our petroleum upstream sector and we need to reduce all the criminalities in that sector to be able to ensure that we have more investments and that we have resources.
"In this second year, there should be more incentives and support for those in the refining sector so that we can significantly reduce product importation. Domestic refining of petrol is very critical."
The CPPE chief said that in the second year of the current administration, there is a need to focus on developing the nation's infrastructure, particularly the power sector, the road infrastructure, the rail system, and our pipelines.
He said: "We need to seek other means of funding our roads, given the critical role of road infrastructure in our economy. The budget alone cannot support our road infrastructure. We need to ensure we have more funding.
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"I'm therefore suggesting that we revisit the road fund bill which was passed by the 9th assembly and let us revisit it to see how we can get more funding for road infrastructure. Over 90 per cent of our logistics is by road."
Power Sector Reforms
He challenged the Tinubu administration to intervene more often in the power sector in the second year of the administration. He said the sector is more important to be left wholly in the hands of the private sector.
"In the power sector, there are a lot of private sector roles but at this stage of our development, we cannot afford to leave the power sector entirely in the hands of the private sector. The government should find ways of supporting the private sector to find the capacity to provide the needed power," he said.
Yusuf, who was also a former Director General of the Lagos Chamber of Commerce and Industry (LCCI), said the government needs to reduce the import bill. This, he said will require government support towards the development of heavy industries, the industries that produce those output that forms raw materials for the other industries and steel sector, petrochemicals, aluminium smelter industries, and pulp and paper industry. These industries are very critical to support our industrial sector and to reduce our level of importation.
Agric Sector
Yusuf stated that subnationals will play an important role in the agricultural sector since they are closer to farmers and that the federal government would need to mobilise state and local governments to promote agriculture.
"We cannot make substantial progress in agriculture or food security unless we address the issue of insecurity. We need to reassess our strategy for dealing with the threat. We also need to address the cost of living to help the country's poor and make the economy more inclusive," he said.
At the presentation of the scorecard for the first year in office, the information minister said amid economic challenges marked by turmoil and unemployment, the Tinubu administration's bold economic reforms had stabilised the economy and sparked growth.
He added that under Tinubu's leadership, the administration addressed important national concerns and enacted comprehensive programmes to promote national growth and development.
