Obinna Chima
The 29th of June, 2023, made it exactly one month since President Bola Tinubu was sworn in as Nigeria’s 16th president. Right from the podium, while delivering his inaugural speech, the former Lagos governor sent a clear message to Nigerians that suggested it would not be business as usual. From his speech, he created the impression that he was ready for business and not the usual kicking of the can down the road that the country has experienced over the years. From the thorny issue of petrol subsidy and the decision to unify the various foreign exchange rates in the country, Tinubu made it clear that he was on a mission to steer the economy towards a growth path and wean it off perennial bottlenecks.
However, while some of his policies have been welcomed and have excited the financial markets and investors, they have also been greeted with attendant challenges, including spiralling inflation, increased poverty level and job losses.
KEY POLICIES/ACTIONS IN 30 DAYS
FUEL SUBSIDY IS REMOVED
From his “fuel subsidy is gone” statement on his inauguration day, in which he further clarified that the 2023 Budget made no provision for subsidy payment, it was clear that Tinubu was out to end a controversial policy that successive governments since the eighties could not address due to vested interest. It was widely believed that fuel subsidy benefitted the rich and hurt the economy badly. However, the pronouncement by Tinubu immediately shot up the pump price of petrol from about N185 per litre at filling stations in some cities in the country to an average of N600 per litre. Indeed, the consensus was that the notorious fuel subsidy policy was a drain on Nigeria’s revenue and was opaque, prompting the call for its removal. As of the first half of 2023, payment for the fuel subsidy was about N3.3 trillion. In addition, the continuous retention of the fuel subsidy by previous governments was a huge burden on Nigeria’s ability to service its debts and created a situation whereby the federal government was borrowing for consumption. This also impeded the country’s ability to invest in human capital development. The government is expected to record significant savings from the action.
MANAGING LABOUR
Following the fuel subsidy removal, it was expected that members of the two labour centres – the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) – would hit the streets in protests. But that was not the case, as the Tinubu-led administration was able to nip the anticipated industrial action in the bud. After a series of meetings, the government promised the unionist that it would work out palliatives, likely a wage increase, among others, to cushion the impact of the hike in fuel price, which has also led to the increase in transportation cost and cost of living.
THE MAN WHOSE SIGNATURE IS ON THE NAIRA NOTE IS SUSPENDED
Another development in his first 30 days was the suspension of the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele.
From Tinubu’s “monetary policy needs thorough house-cleaning” comment on his inauguration day, it was clear that Emefiele’s days as the head of the apex bank were numbered. More so, ahead of the 2023 general election, Tinubu, who was then the presidential candidate of the All Progressives Congress (APC), had alleged that the naira redesign project and the cash withdrawal limits introduced by the Emefiele last October were meant to derail his presidential bid.
“They hoarded money, they hoarded naira; we will go and vote, and we will win. Even if they change the ink on the naira notes, whatever their plans, it will come to nought. We are going to win,” Tinubu had said at one of his campaign rallies.
He reaffirmed this last week during separate meetings in Ogun State, at the palaces of the paramount ruler of Ijebuland, Oba Sikiru Adetona, in Ijebu-Ode, and Alake of Egbaland, Oba Adedotun Gbadebo, in Abeokuta, during a thank-you visit to the royal fathers, maintaining that the cashless policy was part of obstacles thrown in his way.
A trader said the markets are watching to see what would happen to the man who signs the Nigerian currency, adding that until that is resolved, there is likely to be a wait-and-see in terms of serious investment flows.
EFCC CHAIRMAN IS SUSPENDED
The president also suspended the Chairman of the Economic and Financial Crimes Commission (EFCC), Mr. Abdulrasheed Bawa.
For Bawa, he was removed to allow for proper investigations into his conduct while in office. His suspension followed weighty allegations of abuse of office levelled against him, according to the government. While in office, many lawyers and civil society organisations were calling for his removal by former President Muhammadu Buhari.
SACK OF BUHARI’S APPOINTEES ON BOARDS
Tinubu also announced the sack of the governing boards of all federal government parastatals, agencies, institutions and government-owned companies. The dissolution of the boards was in exercising the president’s constitutional powers and in the public interest, the Director of Information in the Office of the Secretary to the Government of the Federation, Willie Bassey, had said.
According to Bassey, the dissolution does not affect boards, commissions and Councils listed in the Third Schedule, Part 1, Section 153 (i) of the 1999 Constitution of the Federal Republic of Nigeria as amended.
“In view of this development and until such a time new boards are constituted, the chief executive officers of the parastatals, agencies, institutions, and government-owned companies are directed to refer matters requiring the attention of their boards to the president, through the permanent secretaries of their respective supervisory ministries and offices,” the statement said.
It added, “Permanent Secretaries are directed, also, to route such correspondences to Mr President through the Office of the Secretary to the Government of the Federation. Consequently, all ministries, departments and agencies are to ensure compliance to the provision of this directive which took effect from Friday 16th June, 2023. Permanent secretaries are particularly directed to inform the chief executive officers of the affected agencies under the supervision of their respective ministries/offices for immediate compliance.”
ABOLISHMENT OF SUPPORT FOR PROFESSIONAL BODIES
In line with its cost-saving measures, the federal government recently notified professional bodies and councils that it would cease to fund them beginning from the 2024 budget. The move was also in line with the decisions of the Presidential Committee on Salaries (PCS) and recommendations in the Orosanye committee report. The Director-General of the Budget Office of the Federation (BoF), Ben Akabueze, conveyed the message via memos sent to the professional bodies.
Some of the memos obtained by THISDAY were addressed to the Registrar/CEO, Optometrist and Dispensing Optics Board, and the Nigerian Council of Food Science and Technology (NiCFoST).
“I wish to inform you that the presidential committee on salaries (PCS) at its 13th meeting approved the discontinuation of budgetary allocation to professional Bodies/Councils effective 1st January, 2024,” stated the memo. “The purpose of this letter, therefore, is to inform you that, in compliance with PCS’s directives, this office will no longer make budgetary provisions to your institution, which means that you will be regarded henceforth as a self-funded organisation.”
It added, “For the avoidance of doubt, you will be required, effective 1st January 2024, to be fully responsible for your personnel, overhead and capital expenditures.”
SIGNING OF ELECTRICITY BILL INTO LAW
Tinubu in his first 30 days also assented to the electricity bill, which authorises states, companies and individuals to generate, transmit and distribute electricity. The new electricity law repealed the Electric Power Sector Reform Act (EPSRA) which was signed by President Olusegun Obasanjo in 2005. The EPSRA (2005) provided the legal, regulatory and governance frameworks underpinning the Nigerian Electricity Supply Industry (NESI). The new Act provides a framework for the improvement of access to electricity in rural, unserved, underserved, peri-urban and urban areas through the use of conventional sources and renewable energy off-grid and mini-grid solutions.
SIGNING OF STUDENT LOAN BILL INTO LAW
Tinubu also signed the Student Loan Bill into law in his first 30 days in office.
Commenting on the new law, the Permanent Secretary in the federal ministry of education, David Adejoh, stressed that “what the President has done goes beyond a symbolism, it’s a demonstration of intent in terms of how he wants to handle education as he progresses in his Presidency.
“The difference this bill makes is that it’s going to be a loans board so that people that don’t have whatever reason, don’t qualify to be able to apply for a loan. I’m very sure the country has learned from recovery rates of loans and the experience we had will be able to guide how this federal students’ loans board will work.”
The new law which was sponsored by Tinubu’s Chief of Staff and immediate past Speaker of the House of Representatives, Femi Gbajabiamila, among others, states that, “the loan referred to in this Act shall be granted to students only for the payment of tuition fees.
“The granting of the loan to any student under this Act shall be subject to the students/applicants satisfying the requirements and conditions set out under this Act.”
But analysts have pointed out that this was not the first time the country would be having a legislation on students’ loan and have continued to question how it is going to operate.
30 CHALLENGES
1. WHERE IS THE FOREX LIQUIDITY?
Despite the two laudable initiative by Tinubu, it is a common knowledge that the major issue with the country’s forex market remains the shortage of dollar supply as demand continues to surge. Therefore, the president must ensure that measures are taken by both the fiscal and monetary authorities to improve dollar liquidity in the country. Therefore, there must be deliberate efforts to address the massive crude oil theft as well encourage non-oil exports so as to boost inflows of dollar to the country.
2) WHERE ARE THE PALLIATIVES TO CUSHION POVERTY?
One area in which the Tinubu-led administration has been severely criticised is its inability to structure measures and palliatives to ease the pains suffered by Nigerians due to the removal of the fuel subsidy. The sudden fuel subsidy removal has caused untold hardship as Nigerians now grapple with the challenges of meeting up with not only the high cost of petrol but also the increase in the prices of goods and services. To many analysts, the new government ought to get the National Assembly’s approval of the World Bank’s $800 million and commence its rollout to alleviate the suffering of the masses. The NLC and TUC had suspended their planned protest in the hopes that the new government would address the adverse effects of the policy on workers. The government had directed the National Economic Council (NEC), led by Vice-President Kashim Shettima, to devise an approach and work on palliatives.
3. STATE GOVERNORS TO GET RICHER
With the removal of petrol subsidies, federation account allocations to the state governors are expected to increase. This could lead to wastage by the governors as there had been allegations of wasteful spending and money laundering by some of them.
4. HOW WILL TINUBU CAGE INFLATION?
Although the Consumer Price Index (CPI), used to gauge inflation, increased marginally from 22.22 per cent in April to 22.41 per cent, it is expected that inflation will accelerate further when the impact of the policy percolates. While the World Bank has already projected that Nigeria’s inflation would hit 25 per cent in the coming months due to the adverse effect of fuel subsidy removal, analysts at KPMG are projecting 30 per cent, with more Nigerians expected to be pushed into poverty.
5. HOW WILL TINUBU MANAGE RISING POVERTY?
The World Bank recently disclosed that no fewer than four million Nigerians were pushed into the poverty trap in the first six months of this year, with another 7.1 million more expected to join the conundrum if properly targeted measures are not taken to manage the impact of fuel subsidy removal. According to the Washington-based financial institution, “compensating transfers will be essential in helping to shield Nigerian households from the initial price impacts of the petrol subsidy reform.”
The multilateral development institution disclosed this during the Nigeria Development Update (NDU) launch last week. Dissecting the NDU, the World Bank Lead Economist for Nigeria and co-author of the report, Alex Sienaert, said four million more Nigerians were pushed into poverty in the first half of 2023. Sienaert, who stressed the need for a new social compact to protect poor and most vulnerable Nigerians in the aftermath of fuel subsidy removal, noted that about 7.1 million more Nigerians would further slip into the poverty quagmire at the end of the year if the right incentives were not properly channelled to help poor and vulnerable Nigerians. Commenting on the headwinds of the forex reforms, he observed a number of adverse consequences, including rising inflation and the increase of debt-to-GDP to about 46 per cent.
6. ANTICIPATED JOB LOSSES
As a fallout of the high energy cost, some businesses may find it difficult to retain their workers, which may lead to layoffs and unemployment in the country.
7. REDUCED PRODUCTIVITY
One of the effects of the fuel subsidy removal without emplacing measures to cushion the impact of the policy is reduced productivity, as some state governments have already announced a reduction in the number of working days. This they did to reduce the number of days civil servants commute to their workplaces.
8. INSECURITY
Insecurity remains a challenge to the Tinubu administration as the spate of killings and activities of terrorists have continued unabated.
9. MASSIVE OIL THEFT
Beyond the fuel subsidy removal, the Tinubu-led administration would have to address the massive crude oil theft in the country that has for decades remained a huge drain on the economy of Nigeria. For this government to succeed, it must end crude oil theft and channel the funds to other critical sectors of the economy.
10. FIGHTING CORRUPTION
The fight against corruption at national and international levels continues to be a serious challenge. The Tinubu-led government must address this challenge as it erodes trust, weakens democracy, hampers economic development and exacerbates poverty.
11. ELECTORAL REFORM
There is a need for electoral reforms to encourage continuous participation in the country’s electoral process and address some irregularities observed during the 2023 general election that brought Tinubu to power.
12. WEAK HEALTH SYSTEM
Nigeria has a poor health system, especially at the local government level. This is responsible for the high death rate in the country, especially the high maternal mortality rate, one of the highest in the world. The Tinubu administration must work hard to fix this challenge. Also, Nigeria continues losing medical practitioners to developed countries due to poor working conditions and remuneration. The country’s doctors-to-patient ratio is about one to 5,000.
13. AGRICULTURE
The previous government anchored its economic diversification agenda on agriculture with programmes such as the Anchor Borrowers’ Scheme. There is a need for the present administration to either maintain it or introduce other innovative initiatives to encourage agricultural activities.
14. NNAMDI KANU
The government must also address the issue of the Indigenous People of Biafra (IPOB) leader, as Nnamdi Kanu’s continued incarceration is believed to be part of the reason for the instability in the South East. In addition, the perceived injustice that has led to the rise of some separatist groups in the country must be addressed to ensure stability in Nigeria.
15. RISING DEBT PROFILE
At about N77 trillion, there are concerns that the country’s debt is becoming unstainable. Therefore, the federal government must take steps to shore up its revenue and reduce its appetite for debt.
16. ORONSAYE-JODA’S REPORTS
Steve Oronsaye’s report appears to be gathering dust on the federal government’s shelf. The Oronsaye Panel was set up in 2011, culminating in the submission of an 800-page report on April 16, 2012, recommending the disbandment and merger of 102 government agencies and parastatals. “Ahmed Joda’s Report is equally as important as Steve Oronsaye’s Report,” said Eric Teniola, a political analyst. He added, “On Ahmed Joda’s Panel Report, the full recommendations must be implemented by the next President. The recommendations summarised are for both the core and indirect poverty alleviation.”
17. MINISTERIAL APPOINTMENTS
Nigerians are watching to see how Tinubu would navigate this challenge and manage the expectations of the political class. Presently, the politicians who helped him to power are insisting that they want to be part of the government, while some others have advised the president to prioritise competence and experts. Specifically, some have warned the president to avoid persons like former Rivers State Governor Nyesom Wike, who appears to be forcing himself on the president.
18. SHORING UP REVENUE BASE
The federal government must initiate deliberate efforts to increase revenue. And to achieve this, there must be an alignment between the fiscal and monetary policy authorities.
19. NATIONAL COHESION
Nigeria is more divided since the 2023 general election, and the government must ensure that the divisions and fault lines pushing the country to the brink are bridged.
20. POOR FUNDING OF EDUCATION SECTOR
The government must address the education sector’s poor funding to improve the output level and address perennial industrial action by members of the Academic Staff Union of Universities and other unions in the higher institutions.
21. WEAK PUBLIC SERVICE
Reforms in the public sector are highly necessary to ensure efficiency and better service deliveries in parastatals, agencies and ministries of government.
22. DILAPIDATED REFINERIES
The federal government-owned refineries must be fixed to decrease imports, generate currency savings, fight inflation, and ultimately improve the country’s macroeconomic outlook.
23. INADEQUATE POWER SUPPLY
Nigeria’s power supply remains poor, a major factor constraining industrial development and production output. The new government must take steps to improve the power supply from its present level.
24. SUSTAINING ECONOMIC REFORMS
Inconsistent policy administration remains a challenge in Nigeria, and Nigerians would eagerly look forward to the government sustaining some of the policies it has introduced.
25. INSTITUTIONAL REFORMS
Nigeria has weak institutions and would require institutional reforms to implement its reforms and development programmes to achieve the desired outcome.
26. BAD ROADS
The government must commit more funds to road projects to reduce the travelling time and deaths on the roads.
27. POOR RAIL INFRASTRUCTURE
More funds are also expected to be committed to developing more railways in the country.
28. CREDIT FOR MSMES
Operators of micro, small and medium-scale enterprises (MSMEs) would look up to the government to initiate policies that would unlock financing to support their businesses and make them competitive.
29. MULTIPLE TAXATION
One of the challenges affecting businesses in the country is multiple taxation. Businesses face different taxes, levies and fees, which eat deep into their profitability.
30. ILLEGAL MIGRATION/JAPA
Lack of job opportunities, poverty, and corruption force thousands of young Nigerians to leave the country every year for greener pastures. Most of these persons go through extremely dangerous routes to Europe, and many die on the road. The government must create a conducive environment for its citizens. There are even more concerns that millions of Nigerians disillusioned by the outcome of the last presidential election, which not a few strongly believe was systematically rigged, are bent on leaving the country by hook or by crook. The disenchanted lot is torn between patriotism and partisanship, with several questions on their minds wondering if Tinubu’s presidency will be a departure from the norms associated with the establishment and tokenism. Or, will the new government, which they have declined to confer any legitimacy on, be more or less the same as the old order?
