One year after being in the saddle, President Bola Ahmed Tinubu will be the first person to admit that the ride has been bumpy. He is also the first to say he is unfazed by the turbulence as he remains focused on the marathon of the next three years. The past year has been months of baby steps, months of laying the foundations for the next three years of canter.
As Nigeria’s 16th President, Tinubu, during his campaign for the office, said he would make difficult decisions and that running the country would not be business as usual.
From day one, he sought to fulfill his promises, beginning from his earthshaking ‘subsidy is gone’ announcement at the Eagle Square, on the day he was sworn in. The announcement reverberated around the country and beyond. He was not just actualising a promise he made. He was also affecting the consensus of all the major candidates in the 2023 election that the several decades old, wasteful subsidy must end.
His administration followed this up with the decision to harmonise the foreign exchange rates. The multiple exchange rates executed under his predecessor had given room to various abuses, among which was arbitrage, where people close to the power loop made humongous money, getting forex at the official rate and offloading it at the so-called parallel market for almost 100 percent profit. Both the International Monetary Fund and the World Bank advised the Nigerian government to end the policy, to no avail, as forex obligations piled up, FDI’s dried up, and investors shunned Nigeria. Tinubu knew that to reset the economy and build renewed confidence locally and internationally, there must be a policy change. He took the measure, just as he promised during the campaign, with the government announcing that it wanted to harmonise the rates in ‘weeks’. The financial world took notice that Nigeria is at the cusp of great change.
Although it has taken months to achieve the harmony, with the Naira in the interregnum, taking a massive bashing from the dollar. The heavily hurt currency at a stage fell to about N1,900 to the dollar, with the naysayers and the opposition predicting a total destruction of the currency. Their wish did not come to pass, as the currency rebounded to earn global acclaim as the world’s best performing currency. After weeks of amassing muscle against the US dollar, the Nigerian currency weakened again. Now, the monetary authorities are working hard to ensure the currency did not fall into the abyss like it did in February, before the rebound.
Together with the abrogation of the subsidy regime, the forex harmonisation policy triggered an inflationary rage, with food inflation hitting unprecedented levels. Cost of living rose countrywide. Some analysts, however, blamed the inflation on other factors such as insecurity that prevented farmers from going to farm and the poor state of roads, that escalated transportation costs, pushing up the costs of virtually everything.
The administration responded on many fronts with a raft of ameliorative policies. Last December, it offered subsidised bus transport and free train service to Nigerians going home for Christmas and New Year. The subsidy was also offered for the return journeys. Over 200,000 Nigerians benefited from the bus service.
In agriculture, the government declared a food emergency, launched a massive dry season farming in important crops such as wheat and maize, along with assisting farmers with N100 billion worth of fertilisers. The government released 43,000 metric tonnes of grains in the reserves and bought another 60,000 metric tonnes of rice from local millers for distribution to the people. States, rich individuals, National Assembly members joined in distributing food and cash to the vulnerable millions in the country. For months, food inflation resisted all the measures, hitting 33 percent in April. Government also rejected the panicky measure of importing food, reposing confidence in the Nigerian farmers, that from their yields, Nigeria will overcome its food crisis. In recent weeks, the news from the markets has been that some food prices are going down.
As part of the ameliorative measures, the Tinubu administration announced wage awards of N35,000 to Federal workers to enable them cope with food inflation and transport costs, as it works out a new national minimum wage. It announced in July last year the Presidential CNG Initiative. Under the programme, that will herald a new industry and new jobs, hundreds of buses and tricycles, which will be powered by Compressed Natural Gas(CNG), will be locally assembled for countrywide rollout. Some of the vehicles will be electric for use in some Nigerian states, where CNG is not readily available. A panel to drive the vision was inaugurated in October 2023. However, bureaucratic delays slowed its procurement work. A large number of the buses and tricycles will be available as part of the ceremonies to mark the first anniversary of the Tinubu administration.
Businesses were not left out of government’s mitigation measures. The Bank of Industry, in conjunction with Federal Ministry of Industry,Trade and Investment, is implementing Presidential Conditional Grant Programme for nano businesses. Disbursement of N50,000 each to the applicants that registered began in April. Beneficiaries included retail marketers, corner shop owners, petty traders, market men and women, food and vegetable vendors, vulcanisers and and shoemakers. Over 1,000,000 nano businesses are targeted. To help big businesses, Government announced an aid package of N1 billion each to 75 of them.
The Tinubu government also approved $617 million for up-skilling Nigerian youths, providing startup funding, catalytic infrastructure, and policy advocacy. Youths with digital skills are now registering to benefit from the fund, being administered by the Bank of Industry.
In a country with 200 million people and tax to GDP ratio less than 10 percent, President Tinubu knew from day one, that it will be difficult to make any great, historic impact, if he fails to tinker with the tax structure and bring more money into the national purse. He announced his plan by setting up the Oyedele Committee on Tax and Fiscal Policy Reform, which is winding up its work and has recommended far-reaching reforms in the tax regime. President Tinubu also changed the leadership of the Federal Inland Revenue Service(FIRS) to plug revenue holes and introduce creative ways to increase revenue without necessarily overburdening the people. The result has been astonishing. Government now takes 50 percent of the revenue of the MDAs, with record N840 billion recorded in the first quarter. The NNPC was ordered to remit its dollar earnings into CBN. Revenue inflow generally is increasing. FIRS is working towards increasing the percentage of tax to GDP to about 20 percent.
The inflow of money is making the Tinubu administration dream big and plan big. With Renewed Hope Infrastructure Fund due for launch, the government is already embarking on legacy projects, such as the 700 kilometre Lagos-Calabar Coastal Superhighway, which began in March. Government also plans to reactivate the Sokoto Illela-Badagry Superhighway, which was abandoned in 1976. Many roads and bridges in state of disrepair are to be refurbished. There are plans for rail. Funding for the Ibadan-Abuja-Kaduna rail is being arranged. Port Harcourt-Maiduguri rail will be resuscitated while the Kano-Kastina-Maradi rail line, started by the Buhari administration will be completed with $2billion dollar loan already secured.
Government has not been short about rolling out several policy initiatives, from the issuance of travelling passports, which has been made quicker, to the planned implementation of some aspects of the Oronsaye report, to cut the costs of governance.
Notably, President Tinubu issued an executive order to enhance investment in the oil and gas sector. The quick fruits of the policy was the opening of three big gas plants in the Niger Delta by the President in recent weeks. Mega investments running into over $15 billion are expected in weeks.
The Tinubu administration has also fulfilled some of the campaign promises with the students loans and Credit Corp ready for take off. To President Tinubu, no Nigerian child should be denied education because the parents could not afford it. He also hopes that the Credit Corp will enhance the purchasing power of workers and boost national commerce.
President Tinubu at various occasions has acknowledged the pains that some of his reforms are causing the generality of our people. But he says they are pains we must bear to make progress as a nation. An ever caring leader, he is always evolving measures to help reduce the pains. Best of all, he listens to the voice of the people and make necessary adjustments.
In one of the most profound analysis of our situation and an endorsement of the reforms being executed by the Tinubu administration, Planning and Budget Minister, Atiku Bagudu said in a recent interview: “We want to be like Asian countries, we want to grow like Brazil but Brazil and those Asian countries that we want, (that) we are competing with, have taken measures that we needed to have taken decades ago.
“The president is even bold to acknowledge that. Let’s do it now. Some of these measures have consequences which we acknowledge. And that’s why again, a number of measures are introduced in order to ameliorate the situation.
“These measures are helpful to Nigeria, irrespective of North or South because they are to restore macroeconomic stability, to restore security in the country and make it better so that investors will feel confident”.
NB: Onanuga is Special Adviser on Information and Strategy to President Tinubu
