ON assumption of office, President Bola Ahmed Tinubu highlighted the direction of his economic policy to kick-start his administration.
The policy is expected to address some burning issues that he inherited from his predecessor, Muhammadu Buhari.
Tinubu was sworn in as Nigeria’s 16th president on May 29, having been announced as the winner of the February 25, 2023 presidential election by the Independent National Electoral Commission (INEC) after securing over eight million votes to defeat 17 other candidates.
During Buhari’s eight years as president, Nigeria’s economy was marred by surging inflation rates, poverty, corruption, and rising food prices, among other social challenges. The ICIR captured these in its ‘Buhari’s eight years in government’ series.
Tinubu is looking to implement key principles that will, according to him, “remodel the economy to bring about growth and development.”
The president said while giving his inaugural speech that his administration would target a higher gross domestic product growth and significantly reduce unemployment.
Nigeria’s GDP recently declined to 2.31 per cent in the first quarter of 2023, according to the National Bureau of Statistics (NBS).
Tinubu intends to reform the budget without endangering inflation, utilize industrial policies to promote domestic manufacturing, make electricity more affordable and accessible, review complaints around multiple taxations for investors, and ensure that foreign businesses repatriate their hard-earned dividends.
Tinubu also said he would create meaningful opportunities for our youth by creating one million new jobs in the digital economy, fashioning an omnibus Jobs and Prosperity bill to the National Assembly, securing the commodity exchange boards on rural income especially towards agriculture, removing fuel subsidy, and unifying the exchange rate.
Inflation, manufacturing and access to electricity data
Tinubu’s economic policies are not unconnected to several debilitating figures around Nigeria’s economy regarding inflation, manufacturing and access to electricity.
For instance, the NBS recently disclosed that the country’s headline inflation rose to 22.22 per cent in April 2023, while food inflation surged to 24.61 per cent.
This is the fourth consecutive rise in 2023. The ICIR reported that under the past administration, the inflation rate rose 59 times in eight years, from 9 per cent in May 2015.
The NBS first quarter 2023 GDP report showed that the manufacturing sector contributed just 10.1 per cent to the country’s GDP, as against 10.20 per cent in the first quarter of 2022.
The ICIR reported how the Central Bank of Nigeria (CBN) increased the monetary policy rate to 18.5 per cent in May 2023. This increase will especially affect businesses that source their funding from financial institutions.
On electricity, about 90 million Nigerians do not have access to grid power, according to data from the Nigerian Energy Transition Plan (NETP) portal.
The NETP also said that the operational grid capacity of the country was at six gigawatts, while 80 per cent of the operational capacity came from off-grid diesel/petrol generators.
Taxation, unemployment, exchange rate
Also, the President seeks to address issues around multiple taxations, unemployment of several youths, and dual exchange rates.
The ICIR reported how Buhari approved the increase of some taxes in April, barely a month before he handed over.
In Nigeria, multiple taxes collected by agencies of the Federal, state and local government have crippled several businesses.
A document published by the Federal Inland Revenue Service (FIRS) revealed that at least eight taxes are collected by the Federal government, 11 by the state government, and 20 by local government agencies.
The NBS said that 33.33 per cent of Nigerians were unemployed, while youth unemployment was at 42.5 per cent as of the fourth quarter of 2020. In real terms, it means 23.2 million Nigerians were unemployed.
However, the Nigerian Economic Summit Group (NESG) said the figure had increased to 37 per cent.
Tinubu also spoke about unifying the dual exchange rate policy. A dollar to naira at the official rate is N460/1$, but at the parallel market, it is as high as N760/1$.
The World Bank said that the poor exchange rate management style by the CBN caused the country $144.1 billion from 2017 to the first quarter of 2021. Another report said from 2020 to last year, the country lost N8 trillion to multiple exchange rate.
‘Fuel subsidy is gone’
Tinubu had always advocated for the removal of the petroleum subsidy. He said in his inaugural speech that he was removing the fuel subsidy and would channel the gains towards other socio-economic developments.
While signing the 2023 budget, Buhari appropriated only N3.6 trillion for subsidy for the first half of the year. He later secured $800 million from World Bank as part of its post-subsidy palliative plans.
However, experts told The ICIR that the president would need to monitor the implementation of policies across several sectors to grow the country’s economy.