Nigeria's President Bola Tinubu looks on after his swearing-in ceremony in Abuja on Nigeria May 29, 2023. PHOTO | REUTERS
Markets across Nigeria are recording fewer customers and diminishing patronage, a result of rising prices of food and other essential goods.
And angry Nigerians living on old wages and salaries have restricted purchases to the quantity they can afford, even if little.
These are the pains President Ahmed Tinubu warned would come to Nigerians soon after he took power last year in May. But he had said the pain would be short-lived, only that he didn’t say by how many months.
Now President Tinubu is finishing his first year in office and Nigerians are still hard hit by inflation which has, for the first time in two decades, rose to 31.7 percent.
Read: Africa economic growth fell to 3.2pc in 2023
The government says the situation is attributed to the economic reforms of 72-year-old leader.
President Tinubu’s first task was to remove the fuel subsidy, which had for years been used to cushion ordinary Nigerians from price hikes of petrol and other regular consumer oils.
Nigeria is Africa’s largest producer of crude oil but had been forced to import all refined fuel because its refineries had collapsed. Its richest man Aliko Dangote then constructed a refinery but even itself can’t serve the entire 200-plus population.
President Tinubu also floated the foreign exchange market and lately raised the electricity tariff by 300 percent for consumers on Band A; those who enjoy electricity supply for more than 20 hours a day.
Nigeria, the most populous country in Africa, has just about 12 million people connected to electricity of whom 1.5 are band A, according to the country’s Electricity Regulatory Agency. The rest must endure regular blackouts.
These policies, according to economic experts, have combined to cause hyper-inflation, which considerably affected essential goods, especially food and medicines as wages remained stagnant since April 18, 2019.
Dr Titus Okunrounmu, a former director for research Department at the Central Bank of Nigeria (CBN), said the tariff increase in addition to the other negative impact of fuel subsidy removal as well as the depreciation of the currency directly force importers to raise their prices.
Read: Nigerians to pay more for electricity under new tariff plan
The President of Nigerian Labour Congress (NLC) Joe Ajaero, decried the current state of the nation’s economy and called for the return of fuel subsidy and reversal of other policies to make life easy and meaningful.
Mr Ajaero described President Tinubu’s action “as palliative policies that have kept Nigerians in perpetual poverty.”
“Nigerian people are the losers; look at the polices, from devaluation of naira, cashless economy, new naira notes, removal of fuel subsidy, Value Added Tax, increase in taxes and many others.
“These are being done without commensurate increase in salaries of the Nigerian workers.’
“Many companies have closed down. A lot of businesses have wind down, youth are leaving the country, the exchange rate of Naira to a dollar hit the ceiling causing increase in prices of goods and services.’’
Central to the economic management structure is the creation of the Presidential Economic Coordination Council (PECC), chaired by President Tinubu himself.
The PECC brings together 12 cabinet ministers and the central bank governor, alongside top economist Doyin Salami and prominent business leaders Aliko Dangote, Tony Elumelu and Funke Okpeke.
For immediate economic challenges, the president set up the Economic Management Team Emergency Taskforce (EET) which is headed by Finance Minister Wale Edun.
The taskforce, which unites cabinet ministers, the national security adviser, head of state oil firm NNPC Ltd., state governors and leading economists Bismarck Rewane and Suleyman Ndanusa, is mandated to develop and execute a six-month emergency economic plan within two weeks.
Read: Tinubu’s silent revolution shakes public service
The President of Standard Shareholders Association of NigeriaGodwin Anono, said: “The people have been grappling with too many headwinds in the economy which have led to increase in the cost of living. These policies have worsen our economic woes.’’
As the knock continues, the government is busy explaining that the subsidy removal was meant to free up some money which would be deployed to boost infrastructure and quality of life.
Okechukwu Unegbu, former president of the Chartered Institute of Bankers Association of Nigeria, blamed the International Monetary Fund (IMF) for these policies, which he argued weren’t suitable for local realities.
It has also led to the astronomical rise in the funds accruing to the Federation Account which is shared monthly by the three tiers of government.
President Tinubu has since rolled out a raft of measures, including funding to states to supposedly ease pain. The money, some N5 billion ($3.2 million), has been released in tranches for social safety nets.
Economic governance
President Tinubu on made an overhaul of Nigeria’s economic governance intended to ease financial hardship and boost productivity, establishing a multi-layered framework to bolster coordination, planning and implementation.
Presideny Tinubu inherited an economy struggling with record debt, high unemployment, low oil output, and power shortages that have crimped growth.
President Tinubu also introduced buses across the states and local governments for Mass transit at an affordable rate and to invest N100 billion ($80 million) to acquire 3000 units of 20-seater Compresses Natural Gas (CNG) fuelled buses.
Read: The double-edged sword of Africa’s rising petrol price
He said participating transport companies would access credit under the facility at 9 percent per annum with 60 months 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 Grant to 1 million nano businesses between now and 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 legacy programme of consumer credit scheme, student loan as well as social welfare programme.
Prof Yusha’u Ango, a Nigerian expert in Finance and Entrepreneurship, advised that the funding of 75 Enterprise with one billion naira each would have more impact if it gets across all the geo-political zones.
Nigerians are now waiting to see how longer the pain lasts.
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