Tinubu taking Nigeria out of economic doldrums

The nationwide protest that kicked off on Aug. 1 across Nigeria, to draw the attention of President Bola Tinubu to the economic challenges confronting Nigerians, soon snowballed into a conflagration.

Scores of innocent Nigerians were mowed, and others had their businesses wantonly looted.

Yet again, government offices were destroyed, equipment carted away, and quite a number of offices were torched.

The protesters were riled by the general high cost of living, which was triggered by the removal of fuel subsidy in May 2023 by President Tinubu.

The protesters were unperturbed by the fact that Nigeria is not the only country in the world where citizens are experiencing high inflation, high cost of essential commodities, particularly food items.

Indeed, no country is immune to the economic turbulence currently ravaging the global economy, which is under pressure from multiple, complex and interconnected crises.

Mr Gabriel Idahosa, the President, Lagos Chamber of Commerce and Industry, acknowledged that the global economy continued to experience persistently high inflation, aggressive global monetary policy tightening, supply chain disruptions, and growing uncertainties amidst geopolitical tensions.

READ ALSO: Tackle economic hardship to avert revolt, don tells Tinubu 

Idahosa said, in his review of the second quarter  of 2024, that the level of uncertainties had continued to threaten business and economic planning across the globe.

But on the local scene, he said Nigeria’s economy grew by 2.98 per cent  (year-on-year) in real terms in the first quarter of 2024, the fourteenth consecutive growth recorded.

He said this was driven by both oil and non-oil sectors, which grew by 5.70 per cent and 2.80 per cent, respectively.

He said the growth in the first quarter was primarily driven by the non-oil sector, which recorded a growth of 2.80 per cent and contributed 93.62 per cent to the Gross Domestic Product (GDP).

President Bola Tinubu insists that since he mounted the saddle 14 months ago his government has made significant strides in rebuilding the foundation of the economy to carry Nigerians into a future of plenty and abundance.

The real deal for the Tinubu administration is overcoming the twin evil of fuel subsidy and multiple exchange rates system.

The President said he took the decision because fuel subsidy and multiple exchange rates had impeded the economic development and progress of the nation.

“These decisions I made were necessary if we must reverse the decades of economic mismanagement that didn’t serve us well,” said the President.

Within a short space of time, the country’s external reserves have increased to $36.89 billion.

The International Monetary Fund and the National Bureau of Statistics estimate the country’s GDP growth rate at 3.1 per cent, while Fitch and Standard and Poor rate the economic a stable B.

The United Nations Conference on Trade and Development also says the country’s balance of trade stands at a surplus N6.52 trillion.

On the fiscal side, aggregate government revenues have more than doubled, hitting over N9.1 trillion in the first half of 2024.

The President said his government had in the last 14 months reduced revenue spent on debt servicing to 68 per cent as against 97 per cent previously.

READ ALSO: Address demands of protesters, NMA urges Tinubu

“We have also cleared legitimate outstanding foreign exchange obligations of about five billion dollars without any adverse impact on our programs.

“This has given us more financial freedom and the room to spend more money on you, our citizens, to fund essential social services like education and healthcare.

“It has also led to our state, and local governments receiving the highest allocations ever in our country’s history from the Federation Account,” he said.

The Tinubu administration deployed its new found financial war-chest in strategic sectors of the economy.

For instance, the President inaugurated the Student Loan scheme on July 17, voting N45.6 billion for payment to students and their respective institutions.

The Tinubu administration also floated a N200 billion Consumer Credit Corporation to make life easier for millions of households.

The scheme was designed to help Nigerians acquire essential products without immediate cash payments, which the President hopes will consequently reduce corruption and eliminate cash and opaque transactions.

The President promptly ordered the release of an additional N50 billion each for Nigerian Education Loan Fund – the student loan, and Credit Corporation from the proceeds of crime recovered by the Economic and Financial Crimes Commission.

He also released N570 billion to the 36 states to expand livelihood support to their citizens, and extended nano grants to 600,000 nano-businesses.

An additional 400,000 nano-businesses are expected to benefit from the program.

On food security, the Tinubu administration is providing incentives to farmers to increase food production at affordable prices.

He directed that tariffs and other import duties should be removed on rice, wheat, maize and sorghum.

“I have been meeting with our Governors and key Ministers to accelerate food production. We have distributed fertilizers.

“Our target is to cultivate more than 10 million hectares of land to grow what we eat.

“The Federal Government will provide all the necessary incentives for this initiative, whilst the states provide the land, which will put millions of our people to work and further increase food production.

“In the past few months, we have also ordered mechanized farming equipment such as tractors and planters, worth billions of naira from the United States, Belarus, and Brazil,” he said.

READ ALSO: Protesters defy Tinubu’s plea, continue demonstration in Rivers

The Tinubu government has also embarked on major infrastructure projects across the country, some of which are inherited projects critical to the country’s economic prosperity, including roads, bridges, railways, power, and oil and gas developments.

He said he was committed to completing those projects, rather than abandoning them as was the case in the past.

“Notably, the Lagos-Calabar Coastal Highway and Sokoto-Badagry Highway projects will open up 16 connecting states, creating thousands of jobs and boosting economic output through trade, tourism and cultural integration,” said Tinubu.

To power the transportation economy and bring costs down, President Tinubu inaugurated a Compressed Natural Gas Initiative (CNG) initiative.

This, he said, would save over N2 trillion a month, the amount of money used to import PMS and AGO, and free up our resources for more investment in healthcare and education.

To assuage the yearnings of workers and quell their agitations over the harsh economic environment, the President approved N70,000 national minimum wage.

The new minimum wage represents an increase of about 133 per cent from the previous N30,000, with an assurance that it would be reviewed after three years, instead of five years.

Alhaji Mohammed Idris, Minister of Information and National Orientation, said the new minimum wage would be complemented with massive investment in transportation.

Idris said he envisaged reduction in transport costs by the time the CNG initiative of the Federal Government took its full course.

“Already, some of these buses have been imported. Some of the  conversion kits are already available. The conversion centers are already beginning to get active,” he said.

He said the CNG scheme would lead to a reduction of over 60 per cent in the cost of transportation.

Idris was emphatic that the government was working hard to reduce the hardship being experienced by Nigerians, particularly in making food items available at affordable prices.

He said 20 trucks of rice had been given to the state governors for onward distribution to the poor in their states.

“The rice distributed is being sold at about 50 per cent of its cost. This rice has been taken to various centers across all the states of the federation, and is being sold at N40,000,” he said.

READ ALSO: NEF tackles Tinubu for ‘overlooking’ insecurity in national broadcast

The minister considers this as an interim measure because there is so much investment going into the agricultural sector including irrigation, hence he expects that prices of food items will come down with time.

In spite of the efforts of the Tinubu administration, some Nigerians expect more, prompting agitations that resulted into the nationwide protest.

But Mr Bismarck Rewane, the Chief Executive Officer of Financial Derivatives, says there is time lag between policy and impact and, as such, there is the need to wait for the outcome of the economic reforms of the President Tinubu administration.

Rewane, during a presentation to business leaders at the Lagos Business School Breakfast Club in May, said policy changes must be followed by institutional reforms to deliver tangible gains that would trickle down to the populace.

One year in office translates to 25 per cent of the life of an administration in its first term in Nigeria.

As Rewane put it, the review of the one-year performance is a sober introspection on the measures of macroeconomic policy and the welfare of the people.

Therefore, he, like many others, believe that 14 months of this administration’s leadership, as well as policy changes and institutional reforms taking place, will soon deliver tangible gains that will trickle down to the populace.