Since assuming office as Nigeria’s President in May 2023, Bola Tinubu’s leadership has ushered in a period marked by a whirlwind of activities, initiatives, and contentious debates.
Branded a “presidential market place” by critics and analysts, the early stages of Tinubu’s Presidency have seen a robust mix of ambitious economic reforms, strategic bureaucratic appointments, and polarizing policy decisions.
These initiatives, aimed at reshaping Nigeria’s economic landscape and governance structures, have sparked fervent public discourse and raised critical questions about their long-term impacts on the nation’s socio-economic fabric.
One of President Tinubu’s most notable policy actions was the removal of the long-standing fuel subsidy and the floating of the naira.
Although aimed at reducing government expenditure and encouraging economic efficiency, these measures received mixed reactions. For instance, global financial institutions like the International Monetary Fund and the World Bank praised the subsidy removal as a necessary step towards fiscal sustainability.
However, it sparked widespread public discontent due to the immediate spike in fuel prices, exacerbating the cost of living for many Nigerians.
These two key policies have caused tremendous hardship on Nigerians, with prices of basic food items soaring beyond the reach of the ordinary citizen.
The National Bureau of Statistics says inflation stood at 33.95 percent in May 2024, with food inflation exceeding 40 percent.
The liberalization of the foreign exchange market has led to a more volatile naira, moving from N460 to a dollar in 2023, to the current rate of N1, 501, representing a 226.48 percent increase within a year.
The removal of subsidies, while economically sound in theory, has overlooked the immediate plight of the average citizen, for whom the daily struggle for survival has intensified.
The policy has resulted in higher transportation costs, which in turn has driven up the prices of goods and services. Consequently, these policies have made it increasingly difficult for many Nigerians to afford basic necessities, contributing to widespread economic hardship and making it challenging for many to afford three square meals a day.
The skyrocketing fuel prices, climbing from N198 per litre to over N617 per litre, has had a ripple effect on the economy. Transportation costs have surged, impacting every sector reliant on logistics and distribution.
From food to medicine, the cost of essential goods has soared, pushing many Nigerians to the brink of poverty.
Unemployment has also surged in the past year, with the current economic policies leading to numerous companies and businesses folding up. The high cost of doing business has driven some multinationals out of the country, resulting in significant job losses.
This trend underscores the direct relationship between President Tinubu’s policies and the rising unemployment rates, exacerbating the economic woes of the nation.
Adding to the nation’s economic woes is the ballooning debt burden. According to the National Bureau of Statistics, Nigeria’s public debt stock stood at N121.67 trillion (US$91.46 billion) in the first quarter of 2024, up from N97.34 trillion (US$108.23 billion) recorded in the fourth quarter of 2023, representing a 24.99 percent increase quarter-on-quarter.
Nigeria’s total external debt was N56.02 trillion (US$42.12 billion), while total domestic debt stood at N65.65 trillion (US$49.35 billion).
This sharp increase in debt, spurred by President Tinubu’s policies, has further strained the economy, limiting the government’s ability to invest in critical infrastructure and social programs.
In response to the growing economic hardship, the federal government has initiated several measures to ameliorate the situation.
Recently, the government approved the disbursement of N50,000 to 100,000 families in all the states of the federation for the next three months.
However, these cash handouts, similar to previous initiatives like N-Power, Trader Moni, and the Conditional Cash Transfer under Presidents Jonathan and Buhari, are unlikely to have a lasting impact on the overall welfare of Nigerians. Such palliative measures, while providing temporary relief, do not address the structural economic issues at hand.
To move forward, President Tinubu must focus on ensuring food security as a matter of urgency. This involves securing the agricultural belt from banditry and terrorism, allowing farmers to return to their fields and boosting local food production. Additionally, reopening borders to facilitate the easy passage of essential food commodities is crucial.
Rather than relying on temporary cash handouts, the government should implement better, more sustainable reforms. There must be a genuine effort to reduce waste and discourage lavish lifestyles among government officials, promoting a culture of prudence and accountability.
Moreover, the current trajectory of borrowing from foreign countries and monetary agencies to manage the economic crisis only plunges the nation further into debt, which was a path previously treaded by President Buhari.
It is imperative that the government seeks alternative solutions to foster economic growth and stability without exacerbating the nation’s debt burden.
Excessive debt accumulation could strain fiscal sustainability, potentially compromising economic stability and national sovereignty. Effective management and utilization of these funds are imperative to mitigate these risks and ensure they contribute positively to Nigeria’s long-term economic resilience.
The administration must therefore balance its pursuit of economic efficiency with the well-being of its citizens, ensuring that the path to fiscal sustainability does not come at the unbearable cost of human suffering.
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