The Tinubu Administration, now in its 16th month, has already made waves that many could not have foreseen. Though less than a third of its tenure has passed, the policies introduced have drastically altered the economic and social landscape of Nigeria. The moment that set the tone for what was to come was President Bola Tinubu’s bold declaration on May 29, 2023, his inauguration day: “Subsidy is gone!” This statement, which effectively ended Nigeria’s fuel subsidy, sent shockwaves through the country. Not long after, the administration took another dramatic step—the floating of the naira—which led to a sharp depreciation of its value.
These two pivotal moves have left Nigerians grappling with skyrocketing inflation, a surge in fuel prices, and a currency that has lost significant purchasing power. The impact on daily life has been profound, affecting everything from transportation and food prices to the overall cost of living. In such a short period, the administration has managed to implement policies that have reshaped the Nigerian economy and its citizens’ way of life, sparking heated debates and widespread concern about the long-term consequences.
The biggest challenge for Nigerians under the Tinubu administration would be the worst cost of living crisis in a generation. For the unbearable cost of living, this is largely a result of the subsidy removal as well as the harmonisation of the foreign exchange market. This has made things so expensive that virtually everyone has been priced out of not only luxury but also necessities. Inflation, though easing, is at 32.15 percent, several times the Central Bank of Nigeria’s (CBN) target of 6-9 percent. Food inflation is even worse at 37.52 percent, with Nigerians facing the worst food insecurity in the world. Nigerians cannot afford food, and even the availability is a problem. Before the easing of headline inflation due to harvests in July and August, inflation was at a 28-year high.
This erosion in purchasing power can be stopped in its tracks by fixing agriculture and ensuring domestic refining as well as full domestic feedstock for refineries. A surplus of food supply can be guaranteed through defeating insecurity, mechanisation, and consigning crude farm implements to history, providing improved breeds and other farm inputs, as well as deploying an effective credit scheme to fund farming activities. For the sky-high pump price, that can be brought down by ensuring competitive refining and supply of feedstock for these refineries. Furthermore, the fiscal and monetary authorities must never work at cross purposes. Because while the monetary side embarks on tightening and the fiscal side embarks on expansionary policy, making the two policies cancelled out and ineffective.
On the other hand, the biggest achievement of the Tinubu regime in my view would be the Foreign Exchange (FX) Reserves accretion. The reserves have experienced a decent growth to $38.05 billion as of 27th September, 2024, from $35.14 billion (by 26th May, 2023) when the President was coming on board. This is despite largely clearly all valid forwards of foreign exchange and deploying millions, if not billions, of dollars to defend the international value of the naira. The growth in the FX reserves means the vote of confidence in the authorities as well as their policies. Despite this, the naira has not appreciated in value, and Nigerians like their naira strong. Furthermore, the average Nigerian has not seen this achievement translating to a better life for himself and his family. So, there is a need to make it count.
In conclusion, governments are instituted for the welfare of the people. Hence, everything must be done to ensure maximum wellbeing of the lead.
By Samson Simon @ Business Day
