On May 29, 2024, President Bola Ahmed Tinubu marked one year in office. Sunday Ehigiator, Esther Oluku, Agnes Ekebuike, and Oluwatosin Osho, give an assessment of his performance, and policy impact on the 'ordinary Nigerians'
On May 29, 2023, President Bola Ahmed Tinubu took office, ushering in a new era in Nigeria's political history. One year later, as the country marks his administration's first anniversary; it's timely to evaluate the progress made towards his 'Renewed Hope' agenda.
During his inauguration, Tinubu declared an end to subsidy and later allowed the naira to float, aiming to stabilize the volatile forex market.
However, the removal of the petrol subsidy has had a profound impact on the economy and standard of living. Despite provisions until June 2023, the abrupt removal led to unprecedented hardship, skyrocketing food and transportation costs, and unaffordable essential goods.
Hunger, starvation, and lamentation have become widespread, exacerbated by worsening electricity supply, increased tariffs, and devalued naira. Access to medical care and necessities has also become unaffordable for many.
Critics argue that the administration's policies, including subsidy removal and new taxes, have worsened the economic situation.
More evidently, the Central Bank of Nigeria's (CBN) introduction of a Cybersecurity levy, aimed at boosting forex reserves, sparked outrage, forcing the President to suspend the policy.
As the administration marks its first year, many question whether President Tinubu has delivered on his electoral promises or underperformed in addressing the country's challenges."
Policy assessment
Like his former president, Muhammadu Buhari's witty political second inaugural statement, "I belong to everybody and I belong to nobody", President Tinubu likewise came with his by promising to "hit the ground running" and "continue running."
Although many Nigerians wondered what the president meant, not until his inauguration did they understand as the president announced the removal of fuel subsidies.
In his inaugural speech, he said: "On fuel subsidy, unfortunately, the budget that existed before I assumed office and what I have heard is that no provision is there for fuel subsidy, so Fuel subsidy is gone."
The pronouncement immediately jacked up the price of Premium Motor Spirit popularly known as petrol from N185 to N500 within a few hours as independent oil marketers stopped sales of existing products in expectation for the new Nigerian National Petroleum Commission Limited, Nigeria's official oil suppliers set price.
Although civil society groups have criticised the president's statement as not well thought out, his Special Adviser on Communication, Mr. Bayo Onanuga, has defended the statement saying that there was no provision for continued payment for subsidy in the budget approved by the erstwhile President Muhammadu Buhari.
Onanuga had challenged journalists to the facts as contained in the 2023 budget urging the public to confirm the veracity of his position. He assured Nigerians that the president's policy was a step in the right direction to salvage Nigeria's economy which was currently servicing debts with 97 per cent of its revenue.
Beyond the subsidy crisis, which even drew bad blood between the President and the organised labour movement, the Tinubu administration, in the last year, has been characterised by a tax burden of all sorts.
Recently, the Central Bank of Nigeria (CBN) introduced a Cybersecurity levy aimed at boosting the country's foreign exchange reserves. However, the policy sparked widespread outrage across various segments of society. As public discontent reached a fever pitch, President Tinubu was forced to intervene and suspend the policy.
This development has raised questions about the President's performance in his first year in office. Has he delivered on his campaign promises or struggled to meet expectations? The controversies surrounding his policies, including the subsidy removal and tax burden, have fueled debate about his administration's effectiveness.
Also, President Tinubu had promised to promote policies which strengthen the local currency. He had made firm commitments to reduce interest rates through the Monetary Policy Council of the Central Bank.
In an attempt to do this, he collapsed the foreign exchange windows into a single Investment and Export (I&E) window in a "willing seller, willing buying" trading platform.
This opened the foreign exchange transaction market to what investors call a "floating" exchange rate with prices determined by the elasticity of demand and supply.
The floating of the naira although praised by investment analysts, has devalued the naira with the local currency falling to an all-time low of N1,900 per dollar in February.
Also, contrary to his earlier remark to reduce the interest rate through the Monetary Policy Committee (MPC) of the Central Bank of Nigeria, last week saw the MPC increase the credit basic point increase to 150-basis-point or from 24.75 per cent to 26.25 per cent.
Recent Monetary Policy Committee directives have approved the upward review of the interest basis point to 150-basis-point or from 24.75 per cent to 26.25 per cent. This essential translated to an increase in the amount being charged as interest on loans to the borrowing public.
While the policy is expected to reduce the rate of borrowing of the public by mopping up more naira to lending and financial institutions thereby strengthening their capital base, the Manufacturers Association of Nigerian (MAN) in a meeting with journalists over the weekend have highlighted that the policy will cripple the Nigerian manufacturing sector whose source of capital will increase as this will adversely affect the prices of goods produced locally.
MAN's Warning
MAN warned that the recent decision by the Monetary Policy Committee (MPC) to increase the interest rate to 150-basis-point or from 24.75 per cent to 26.25 per cent would lead to further decline in the manufacturing industry.
Addressing journalists in Lagos MAN Director General, Mr Segun Ajayi-Kadir, noted that drawing from Nigeria's 2022 participation in the World Trade Organisation of a paltry $3.21 billion compared to South Africa's $45.38 billion and Morocco's $30.61 billion, measures which increase inaccessibility to liquidity for manufacturers would further weaken the sector.
He argued that the decision made by the MPC will further compound the already high cost of doing business, consequently diminishing the competitiveness of Nigerian products in the global market as high lending rates exceed 30 per cent making Nigerian goods less competitive to products from other nations.
"The recent decisions by the Monetary Policy Committee (MPC) exacerbate these challenges by further tightening credit interventions, increasing loan costs, raising production costs, limiting fund accessibility, and eroding investment and competitiveness within the manufacturing sector.
"It is evident that the MPC leans towards prioritizing the financial sector over the real sector, rather than striving for a balanced approach between the two. These effects are intensified by the current monetary stance, contributing to:
"The combination of heightened borrowing costs and reduced liquidity will hinder manufacturers' ability to invest in innovative technologies, expand production capacities, or venture into new markets."
He opined that alternatively, the MPC should consider other options which strengthen the monetary policy while also catering for the manufacturing industry making for greater progress for the nation and its people locally and among the comity of nations.
According to him, measures such as "implementing targeted interventions aimed at mitigating the underlying cost-push factors driving inflation, thereby alleviating the financial burden on manufacturers.
"Prioritising forex and credit allocation to the manufacturers and fast-tracking the proposed recapitalisation of the banking sector, emphasizing the development of infrastructure within industrial hubs and bolstering nationwide investments in renewable energy sources to alleviate logistical expenses and enhance competitiveness.
"And, further reduction in the reliance on imported products and raw materials by providing incentives for investment in backward integration and local sourcing to reduce the pressure on the dollar to the barest minimum," should be considered to make for a more prosperous nation.
Fx, Inflation, and the MPR
As President Tinubu begins his second year as President of Nigeria, the country's economy continues to face significant hurdles, particularly in currency stability, inflation, and the Multidimensional Poverty Rate (MPR).
Despite efforts to address these issues, key economic indicators suggest limited progress since he took office.
Foreign Exchange Rate
Before Tinubu's presidency in May 2023, the Nigerian Naira was already struggling. The official exchange rate was about N460 to the US Dollar, with the parallel market rate at N740.
This gap underscored the volatility in managing foreign exchange reserves. Since Tinubu assumed office, the situation has worsened. By mid-2024, the official exchange rate surged to as high as N1,460 to the Dollar, and the parallel market rate exceeded N1,700 Naira.
Economists link this depreciation to high foreign currency demand, decreasing reserves, and global economic uncertainties.
Dr Emeka Umejei of the University of Lagos noted, "The underlying economic fundamentals remain weak, hindering effective currency stabilization."
Inflation Rate
Inflation has been another persistent issue, driven by structural problems, food price volatility, and currency depreciation.
In 2022, inflation hit 21.34 per cent, fueled by rising food and transportation costs. Under Tinubu, inflation rose to around 24.1 per cent by mid-2024, significantly impacting the cost of living and household incomes.
In reaction, the CEO of Financial Derivatives Company, Bismarck Rewane, noted that "Monetary policy alone has been insufficient to curb inflation. Structural reforms are necessary to tackle its root causes, such as improving agricultural productivity and stabilizing the exchange rate."
Assessing Current MPR
Multidimensional Poverty Rate (MPR), which includes factors like education, healthcare, and living standards, remains a critical issue. In 2022, around 40 per cent of Nigerians, about 83 million people were said to be living in multidimensional poverty.
Despite Tinubu's focus on poverty reduction, the number is expected to plunge further following the current economic situation and ever-dwindling purchasing power of the people.
Initiatives aimed at job creation and better access to basic services have had limited impact.
Social Policy Analyst, Dr. Olumide Adesina emphasized, "Poverty is deeply entrenched due to systemic issues. Significant investments in education, healthcare, and infrastructure, along with efforts to combat corruption, are essential."
The Tinubu administration faces the urgent need for comprehensive and sustained reforms to address these economic challenges. Boosting local production, enhancing fiscal discipline, and improving governance are critical steps.
Director-General of the World Trade Organisation and former Nigerian finance minister, Ngozi Okonjo Iweala, remarked, "The challenges are daunting but not insurmountable. Nigeria has the resources and potential to overcome these issues, but it requires strong political will and coordinated action."
As the nation looks for substantial economic improvement, the effectiveness of Tinubu's policies will be pivotal in shaping Nigeria's future. The coming years will be crucial in addressing the entrenched economic issues and setting the country on a path to stability and growth.
Opposing Views
Despite the cons, many analysts argue that President Tinubu should not bear sole responsibility for the current economic and social challenges facing the nation.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
Some argue that the country was already in a precarious state, 'bleeding and on life support' before his administration took office.
According to this view, the government must make tough decisions to address these issues, even if they cause short-term suffering.
Without recourse to the fact that Tinubu's administration is a continuation of the All Progressive Congress (APC) tenure in office after President Buhari's eight years, proponents of the Tinubu administration point out that he inherited an economy severely battered by corruption and insecurity, which had brought the country to its knees.
They argue that his government is working to address these longstanding issues and that progress may take time. They expressed belief that with the policies and cabinet members in place, the nation will soon reap the benefits of their hard work.
Tinubu Inspires Hope
Despite current economic hardships, Tinubu's eight-point Renewed Hope Agenda encourages Nigerians to be patient, promising that things will improve soon. As the saying goes, "commitment is what transforms a promise into reality."
Tinubu has demonstrated unwavering commitment, the foundation of character, which transforms scepticism into triumph. He has shown no signs of defeat, pressing on despite obstacles.
Acknowledging the challenges, Tinubu admitted that the past year has been bumpy and rough.
However, he emphasised that governance must be transformative, addressing citizens' critical needs.
Despite challenges, he found the past 12 months fulfilling, with his administration tackling issues head-on.
He said: "It has been challenging. It has been fulfilling as well. We took over, and we stopped the bleeding. I can say categorically now that Nigeria is no longer bleeding. And it will not bleed to death, but rather will now move to prosperity. That is the promise that I made to you all, and it is also the charge that you gave to me.
"We are managing to swim through the pond. The current is not a good one. We will turn the tide. We are turning the bend. This I assure you. I am being very careful. The worst is over for Nigeria. We will prevail.
"I thank the team who has been working hard. All I can promise is that we will do whatever it takes. We are determined, and we will work so that all Nigerians can feel the impact of good governance."
The President assured Nigerians that his administration will ensure they get value for every kobo spent, and that his government will leave a lasting legacy of prosperity to future generations while removing the yoke of poor governance and expanding access to qualitative public goods.
"We will get value for our money, and it is not for ourselves, but for our children. Our children will not inherit the burden of bad governance. Yet, they will enjoy the prosperity of Nigeria as a blessed nation from our very hands; from our sweat. We will bequeath to them a nation full of pride and prosperity," President Tinubu said.
With unwavering commitment, Tinubu continues to work towards a better future, inspiring hope in the face of adversity.
