President Tinubu should urgently stimulate the economy for the creation of jobs and forget the recent National Bureau of Statistics’ reformulation of Nigeria’s unemployment figure at 4.4 per cent.
President Bola Tinubu clocked 100 days in office on 6 September, while in India for the G20 summit. Its coincidence with the Presidential Election Petition Tribunal’s validation of his victory in the 25 February general elections made the milestone all the more remarkable for him. On his first day in office, he took the bull by the horns with a bold statement on his administration’s policy trajectory. At home and on the foreign scene, governance moved at a dizzying pace, with a melange of outcomes.
The 100-day tradition, the making of a former US President, Franklin D. Roosevelt, which calibrated his policy and governance successes amid the ravages of the Great Depression, perfectly fits the need for a preliminary assessment of the direction of the Tinubu administration, given the poisoned chalice he inherited on all fronts from his predecessor, Muhammadu Buhari. The fuel “subsidy is gone” salvo, which he fired while delivering his inaugural speech has sparked waves of economic concerns. It was a bolt from the blue. Shortly after, he floated the naira, in a bid to merge the official and parallel foreign exchange market rates.
These market-driven reforms have been lauded by economic experts, the World Bank and the International Monetary Fund. However, their gnawing socio-economic impacts on Nigerians, especially the 133 million multi-dimensionally poor, are life-threatening. The inflationary spiral is affecting food costs, the prices of transportation by over 300 per cent, and the escalating values of other goods and services. The naira has been on a free-fall against the dollar; it exchanged for N950 to $1 at the parallel market last Friday. Evidently, the policy has so far failed to achieve the purpose for which it was designed – to stabilise the market.
Attempts to reposition the economy inspired the setting up of a Presidential Task Force on Fiscal and Policy and Tax Reforms in August and a forensic scrutiny of the Central Bank of Nigeria (CBN) activities. Suspended CBN governor, Godwin Emefiele, is now being prosecuted over an N6.9 billion corruption charge; while the equally suspended Chairman of the Economic and Financial Crimes Commission (EFCC), Abdulrasheed Bawa, has been detained since 14 June. His offence has not been made public, and his detention without trial has gone well beyond the bounds of the law. Democracy inveighs against this obvious act of impunity. Under the Administration of Criminal Justice Act (ACJA) 2015, a remand order without prosecution spans only 56 days at the most.
The CBN Anchor Borrowers’ Scheme of N1.1 trillion, a seemingly political slush fund, was subjected to an inquest. In fact, Tinubu gave 18 August as deadline for security agencies to recover a whopping sum of N577 billion un-repaid balance, for this to be given to real farmers. Two banks, which also appropriated the N10 billion custom duties they collected on behalf of the federal government, have been temporarily delisted from continuing with the collections and compelled to remit the funds.
Interestingly, the net effect of all this economic policy drives under Tinubu in 100 days is increased revenue. A total of N1.956 trillion accrued to the Federation Account Allocation Committee (FAAC) in July, and was shared by the three tiers of government. When this is contrasted with the N786.161 billion distributed in June and N655.93 billion in May, the upsurge becomes quite glaring. But the fiscal leap is just a cold comfort. A new minimum wage for workers and its consequential adjustments in salaries are yet to be factored in. This pushed the Nigerian Labour Congress (NLC) into a two-day warning strike, penultimate week. The government’s continued inertia has earned it a fresh 21-day ultimatum to act fast or bear the consequences. This is ominous.
In response to doubts about the integrity of the National Social Register, which would have been used to share the $800 million subsidy removal palliatives, Tinubu’s administration dropped the idea. This was fair enough! Paradoxically, the alternative mode adopted in August by giving N5 billion each to governors of the 36 states, to buy 100,000 bags of rice and 40,000 bags of maize and fertiliser for distribution to the poor is not delivering results either. The implementation is anything but painstaking. Some states have not even started on this. Viral videos of how these food items are being scrambled for at sharing centres in some states, earns the scheme a thumbs-down.
In June, the president had promised to review the minimum wage to align with current economic realities. But the administration’s pussy-footing on this and the ever-increasing hyper-inflation give room for doubt. Even without anything done yet, Tinubu inadvertently expressed mortal fear of the hike while playing host to the Global Vice-President of Oracle, Andres Garcia Arroyo. He said, “each time they give me the payroll number, I get frightened,” wondering where he would find the funds for the badly needed national infrastructure development. This explains why he got it wrong with his envisioned 48-member ministerial team, reduced to 45 with the Senate’s rejection of three nominees. The cabinet, including nine ex-governors, is not superlative as Nigerians had anticipated.
Not only bloating payroll figures should worry Tinubu. Insecurity, oil theft in the Niger Delta and its corollary of foreign exchange paucity should petrify him too. Since he did not appoint a substantive minister of petroleum, he seems to have adopted the unconstitutional behaviour of two of his predecessors by quietly grabbing the portfolio himself. On his watch, in 100 days, the Navy burnt three rogue oil vessels – MT TURA, MV CECELIA and MV OFUOMA. With Nigeria’s oil output at 1.1 million barrels per day, at the end of August, this continues to be far below the OPEC quota of 1.7 million barrels per day allocated to Nigeria. This is telling on Nigeria’s foreign reserves, which was secretly depleted to a very low level under the embattled Emefiele as CBN governor.
Instead of the presumed $37.08 billion reserves, at the end of 2022, JP Morgan said a few weeks ago that the net figure is actually $3 billion. So acute are FX shortages that foreign airlines had $812 million from ticket sales trapped in the country as of the 4th of June. Some of them have temporally stopped their operations as a result. It is the same harrowing experience for other foreign investors and Nigerians with dollar obligations.
On the foreign scene, Tinubu footprints have been remarkable in economic diplomacy. Nine countries – Guinea-Bissau, France, Kenya, the UK, Italy, Russia, South Africa, Benin Republic and India – were visited by the president and his deputy, headlined by the $14 billion investment pledges by Indian business moguls during the recent G20 meeting in Delhi. In return, he pledged the best returns on investment to them and vowed to break all barriers for this to happen. From India, his diplomatic shuttle took him to the United Arab Emirates (UAE), where he held talks with the authorities on the lifting of the visa ban on Nigerians and resumption of flights between both countries.
The optics was good for the government. But clearing the domestic mess would give ultimate meaning to his peregrinations. It is the magnet that attracts foreign direct investments. Investors’ capitals go to jurisdictions where they are safe; the sanctity of legal agreements is respected; and repatriation of funds not encumbered by FX shortages, among other imperatives. Unfortunately, Nigeria’s deficits in these areas are huge.
A total war on corruption, recovery of over $100 billion from crude oil theft and other revenues, from some crooked multi-nationals and state officials are urgent to shore up the foreign reserves, and stabilise the naira, just as the government’s adherence to the rule of law, transparency and accountability are not negotiable. The ongoing inquest into the activities of the apex bank should be extended to the state oil behemoth – NNPC Limited.
If CBN’s “financial system is rotten,” as the president described it, then that of the NNPC would certainly dwarf all pejoratives. From the alleged 66.9 million litres of average daily fuel consumption in the country, for which over N400 billion subsidy was paid monthly, the average daily consumption dropped to 18.5 million litres in June after the fuel subsidy removal, according to official statistics. Rottenness in the fiscal space thrives because of the lack of transparency or cover-ups and not holding anybody to account. This must change.
As Chairman of ECOWAS, it is good that Tinubu allowed reason to prevail in the regional bloc’s sabre-rattling for restoring democratic rule in Niger Republic, following a military coup in July. Nigeria would have picked much of the bill, if military operations were engaged, a responsibility presently at odds with its own security burden. Global Rights Nigeria records show that 555 people were killed in less than six weeks of the president’s assumption of office. The North-West and North-Central remain killing fields of non-state actors
When military personnel are not safe, as evident in the 36 soldiers killed in an ambush in Niger State, and the downing of an Air Force helicopter in August, Tinubu has a lot more to do to guarantee security across the six regions. This is why we we wonder what he intends to achieve with his choice of two ex-governors, with no security pedigree – Mohammadu Badaru and Bello Matawalle – as Minister and Minister of State for Defence respectively. He should urgently stimulate the economy for the creation of jobs and forget the recent National Bureau of Statistics’ reformulation of Nigeria’s unemployment figure at 4.4 per cent and address the rot in the education and health sectors for a better society.
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