In this edition, we asked Tunde Lemo, former Deputy Governor, Central Bank of Nigeria, and Chairman of Titan Bank, to put on his binoculars, take a peep into 2023, and share his thoughts with us. Please enjoy.

A new year is here and it is like none other. Nigerians should prepare for a bumpy ride because the year is loaded with landmark events that would redefine the course of the country in significant ways. Apart from being an election year, a population census is also on the cards and the vexing issue of petroleum subsidy must be decided one way or the other in 2023. How these issues are resolved would determine whether the country sinks or floats in the next decade and beyond.


The general elections, slated for next month, provide another opportunity for the electorate to renew the ‘employment’ of elected members of the government at state and federal levels. While some incumbent office holders would be presenting themselves for re-election, others such as President Muhammadu Buhari, would not be on the ballot having served the maximum term limit prescribed by the constitution

Periodic elections make elected officials ACCOUNTABLE to the electorate and if the election process is CREDIBLE, OPEN and TRANSPARENT, the system benefits in the long run. If the process can be rigged, the system loses because elected officials will simply not bother to perform to the satisfaction of the electorate. All they will need to do is to steal enough money in office to buy future elections. There is, therefore, a positive correlation between economic development and the quality of the electoral process.


Interestingly, no national population census was conducted in almost 20 years when the norm is for a population census to be conducted at least once in 10 years. Accurate census is considered a major tool for planning and economic development. For instance, the USA re-delineates constituencies to redistribute the number of representatives in each constituency, using objective criteria.

So, locations like Lagos State and the Federal Capital Territory (FCT) which have been net beneficiaries of immigrants from other states would by now have more representatives at the National Assembly than other states that reported net emigration. The updated population figures also assist in the provision of infrastructure, sanitation, social facilities like schools and hospitals in the communities and so on. Unnecessary politics and tribal sentiments don’t come into play but HARD DATA is needed for planning and development.

Elections and population census are high stake activities in Nigeria and both had often resulted in political crises and violence. The year is therefore filled with uncertainties. The Independent National Electoral Commission (INEC) is doing its best but I have not seen enough sensitisation to prepare the minds of the citizens on the benefits of both activities. Deployment of technology has assisted a great deal in making our elections more credible but a major concern remains that of VOTE BUYING. If we can do something about this, we would have significantly improved the system and, by extension, improved VOTERS TURNOUT.


The economic landscape is not very impressive. Inflation is still at the high rate of 21.34 percent; exchange rate has been very unstable in the past few years and the gap between the parallel market and official rate is currently about N300, far more than the threshold acceptable internationally, even for managed currencies. Unemployment rate is 33% while the number of people living in multidimensional poverty rose to 133 million in 2022.

Besides, the new administration will be inheriting a debt profile of more than N77 trillion, inclusive of about N23 trillion unsecured ways and means advances from the CBN. Deficit financing is not abating. More than 50 percent of the recently released 2023 Budget is expected to be financed by local and foreign loans. Meanwhile, foreign loans are becoming more difficult to negotiate in the light of Ghana’s recent default as well as rising interest rates in the OECD economies.

On the other hand, resorting to domestic borrowing will crowd out the private sector and raise the borrowing rate of the government to unsustainable levels. Nigeria’s foreign loans need to be re-negotiated ahead of due dates. We must not contemplate a DEFAULT as this can be fatal going forward. INTERNATIONAL INVESTORS DO NOT FORGET!


The Federal Government must be commended for not including petroleum subsidy in the budget beyond June 2023 because it is no longer realistic to continue to keep the subsidy, given the fiscal imbalances resulting from the subsidy claims. Presidential candidates of the three leading political parties have also indicated their desire to remove the petroleum subsidy, if voted into power. This is a welcome development as this has not only drained government’s resources, it has prevented the full deregulation of the downstream sector.

We shall certainly have a bumpy ride in 2023. Nigerians should prepare to sacrifice more if they wish to have a solid foundation for a secured future and prevent a descent into insolvency (I hope it is not too late already). Any candidate that wins the presidential election in February should NOT be congratulated! We should simply greet and say: OUR PRAYERS ARE WITH YOU. MAY GOD TAKE YOU THROUGH THIS TRYING PERIOD.

Petrol may sell for as high as N500 per litre, but this should not scare anyone since countries with lower per-capita income are already paying far more. Nigerians should perish the thought that petroleum products will become cheaper with the coming on stream of the DANGOTE REFINERY. It should be noted that the refinery will operate like any other refinery and would be paying international prices for its major inputs, including crude oil. Even if the crude oil is sold to the refinery in Naira, spare parts and additives would have to be purchased in hard currency.

Meanwhile, the advantage of proximity that will eliminate freight cost will not give more than seven percent price gain. Nigerians must be ready to pay international prices for fuel just as they have been paying international prices for diesel and jet fuel. The increase will only add between two and three percent to HEADLINE INFLATION, given the proportion of fuel in our CPI basket and the impact will be ONE OFF.

Petroleum products which were hitherto being smuggled to the neighboring countries can now be officially exported to those countries and this will ease the pressure on forex and help in reserve accretion.


Taxes must also go up because Nigeria’s tax-to-GDP ratio of just over 6 percent is about the least in Africa. Our comparators have over 12 percent. The International Monetary Fund and other development partners have consistently been canvassing for higher Value Added Tax (VAT) in line with what obtains elsewhere. I strongly plead that the fiscal authorities should not just impose more taxes on those who have been paying, they should WIDEN the tax net to improve on tax compliance. The former will hurt growth and employment and is inflationary since the burden of tax will be passed to the consumers.


Nigerians should also expect devaluation as the CBN pushes the official rates closer to the parallel market rates to reduce arbitrage opportunities. This is long overdue to bring order to the forex market and improve liquidity, among other benefits. Food prices may not decline too soon because of the security pressures in the north and global warming induced floods especially around the banks of rivers Niger and Benue. The Ukraine crisis, now almost a year old, will continue to exacerbate the food and energy crises globally and we shall be negatively impacted as about 30 percent of our wheat import is sourced from that corridor.

Interest rate is also expected to rise as the government grapples with loan restructuring and securitises the CBN’s ways and means advances. The bond announced by the president will have a coupon rate of nine percent and will not appeal to the public because it is long tenored – 40 years. Investors will definitely demand for far more than the 2-year government bonds which currently trade at around 12 percent. In the end, CBN may remain the SOLE INVESTOR of this SPECIAL BOND in the foreseeable future. We do not expect the CBN to depart from the present ‘hawkish’ mode anytime soon to rein in inflation. This will be a major monetary policy dilemma- the ‘impossible trinity’ of inflation, interest rates and exchange rate are all looking north!

The government should rein-in unnecessary expenditure at all levels. The ORONSAYE REPORT should be urgently implemented by the government. We must copy the Anambra State Government by patronising locally-made vehicles and other products. We must LEAD BY EXAMPLE. The new government must also be strong on prevention of oil theft from its first day in office. This will help to preserve forex earnings, shore up foreign reserve and by extension stabilise the value of the naira as well as reduce environmental pollution in the Niger Delta region. The current crude oil production level of 1.2 million barrels per day is just about two-thirds of our OPEC quota.


The incoming government must work hard to improve security of lives and property. A lot has been done to contain Boko Haram in the North East, but banditry and kidnapping are also serious enough to tackle head-on. The much needed Foreign Direct Investment can only be attracted if we improve National Security.

No doubt there are bumps ahead, but God will take us through. We shall end the year in praise. GOD BLESS NIGERIA.

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