Tinubu-pain or Buba-pain?

For context, let us chew on this information. When Buhari took over in 2015, Nigeria’s inflation rate was 9%. When he dropped the baton in 2023, the headline inflation rate had skyrocketed to 29%! Today, it stands at 34%, with food inflation at 39%, the seventh highest in the world.

No doubt, Nigerians are suffering without the usual smiles, the suffering not seen for decades. In historic Nigerian city-states, the reigning monarch was deemed responsible for both good times and bad times. Back then, without the benefits of economic science, no interrogation could be done to determine whether the poor times were a spillover from the past monarch. Unfortunately, this sentiment persists in the country among the general population and the intelligentsia. Today, no one remembers Buhari’s disastrous policies that preceded Tinubu. Today, it’s T-pain, forgetting the horrendous damage done to the economy by the previous administration.

The consequence is that another generation will grow up believing today’s necessary reforms, which reversed the self-proclaimed unorthodoxy of Buhari’s economics, are bad, while Buharinomics was a good thing. The country is setting itself up for a repeat of another bout of Buharinomics in the not-too-distant future. When the same treatment was meted out to President Buhari in 2017, as the economy failed to respond to his policies, he was able to blame previous administrations but his own. The citizenry accepted his excuses, and he was reelected. The Tinubu administration has been hard-pressed to behave likewise, that is, blame Buhari, for obvious reasons.

To be candid, suffering in Nigeria can be laid squarely at Buhari’s feet. The Nigerian economy had witnessed declining inflation rates and sustained rapid growth for fourteen years before Buhari’s advent in 2015. To illustrate this, I have to borrow some medical scenarios. Currently, the Nigerian economy could be said to be exhibiting withdrawal symptoms from its various addictions: chronic addictions to subsidies, addiction to borrowing, and addiction to money printing, among others. Rather than the Buhari administration cutting off these addictions, they piled on more of the abusive substances. Tinubu has withdrawn these abusive substances, and the Nigerian economy is suffering from withdrawal symptoms! As happens in medicine, so too in economics. In 2015, the economy was handed over to a team of quacks who misdiagnosed and went ahead administering paracetamol to a patient who had typhoid, and the patient almost died.

It is becoming evident that the current doctors attending to the Nigerian economy do not grasp the gravity of the problem either. They drive economic reforms, tax reforms, instead of driving economic transformation. One could believe they are the first administration in Nigeria to sell reforms. No, they are not; that was the mantra sung by Okonjo-Iweala under President Obasanjo in the early 2000s. Before she was Chief Falae, the proponent of Nigeria’s first economic reform program under General Ibrahim Babangida. Yet what Nigeria sorely needs is not only reforms and growth but economic transformation.

The IMF and World Bank joined the fray and advised Nigeria to stop going back and forth—from economic unorthodoxy to reforms, then back to unorthodoxy or our own home-grown talismanic economics. I suppose this is why the IMF or World Bank country representative pleaded for time. Speaking, he said Nigeria needs years of uninterrupted reforms before the dividend of reforms will assuage the people’s suffering. However, the IMF too erred in calling for just reforms, keeping Nigeria from achieving its potential.

The IMF representative’s statement is valid up to a point. We have countries that have not interrupted their reforms and, decades down the road, are reaping great dividends from uninterrupted economic reforms. Poland is an example. Poland jettisoned state-controlled economics for a market economy in the 1990s, and today they are challenging Germany as the strong economy of Europe. India is today the world’s fastest-growing economy, a position Nigeria once held in the 2000s and 2010s. India, too, has stayed the course of reforms from the 1990s.

On the other hand, we have countries that behave as Nigeria does. Argentina is one; so too are Venezuela and Bolivia. Recently, some Buhari apologists joined traditional IMF bashers to pillory Tinubu for simply putting a stop to Buharinomics and going back to economic orthodoxy. There are those who do not know where to stand and, on account of the pain, say it’s the methodology of the reforms that is bringing on the pain. They accepted fuel subsidy had to go, but Tinubu should not have made the pronouncements. He should have set some things in motion before implementing a graduated subsidy removal. I beg to vehemently disagree based on the toxic romance Nigeria has had with the politics of subsidy removal since the time of General Babangida. Obstacles have always been placed in the way so as to continue the illegitimate romance.

Others say both forex market deregulation and subsidy removal should not take place simultaneously. One poison should be left working its magic until the other poison has left the system. By these, naysayers have given Buhari a soft landing and picked on Tinubu. Meanwhile, there are no quick fixes, as the IMF representative told us.

President Tinubu has economic addictions of his own. Just as Buhari could not change his spots, President Tinubu cannot change his warts either. He is a statist at heart, so he can’t downsize government. This should be a focal part of Nigeria’s economic reforms. Neither can he stop borrowing, as he did when he was Lagos governor. He can’t implement the Oransanye report because he is a big-government advocate at heart. He is at the opposite end of where President Javier Milei of Argentina is on the ideological spectrum, yet we need Javier-like actions if we don’t want to remain in Peronist Argentina mode.

President Tinubu set up the Presidential Committee for Fiscal and Tax Reforms. However, we have received only tax reforms and silence on other fiscal reforms. Lately, Mr. Taiwo Oyedele came out to tell us tax reforms will grow or develop the economy. How can this be? It’s akin to when Kemi Adeosun, Buhari’s first finance minister, sold us on how infrastructure expenditures would grow the economy. As CBN Governor Mr. Yemmy Cardoso confirmed, all it achieved was a 1.8% annualized economic growth over the last nine years. You can’t couple the horse behind the cart and expect positive results. Tax reforms to buoy up government spending, without other fiscal reforms that will lead to economic transformation, is putting the cart ahead of the horse.

I have made the submission that the pain Nigerians are experiencing is from eight years of Buhari’s unorthodoxy, and the IMF stayed away from Nigeria. However, President Tinubu’s own pain will begin if he refuses to reform his statist government profligacy policies. Pain-inducing inflation cannot be treated by monetary policy rate hikes alone. Government spending has to be collapsed, as in Argentina. Government spending also has to be more efficient, not just lower.

Allow me to reiterate: your tax reform is not an economic reform. To make it one, you would have to adopt supply-side economics to draw in more businesses and investors. Neither is adopting market policies enough; you have an economy to transform. China, after adopting economic reforms, went ahead and transformed its economy to become the builder and manufacturer of the world. 50 years ago, China was exporting kerosene stoves around the world; today, they export electric vehicles. 50 years ago, Nigeria’s dominant export to the world was crude oil; today, crude oil remains Nigeria’s main export, being pursued by your administration. This is not how to achieve double-digit growth and a trillion-dollar economy.

Dr Jaiyesimi writes via [email protected]; he can be reached on 08123709109