Of President Tinubu Economic Sins -Part 2

In the first part of my article, I noted that notwithstanding the seemly lack of faith in President Tinubu’s ability, particularly given his age on assumption of office and the unsavoury news - allegedly about his relatively fragile health condition at the time, nothing could have prepared one for the shocker that would come with the announcement President Tinubu made on the very same day he assumed office. I further stated that while one might have understood he meant business about hitting the ground running from day one, having been crystal clear about the Presidency being his 'birthright' and his turn at the time via his "EMILOKAN" campaign, a good number of Nigerians (myself inclusive) were utterly shocked when he announced the subsidy removal on the same day he took his oath of office as the President of the Federal Republic of Nigeria. It would be recalled President Tinubu based his decision of the petrol subsidy removal on the ground that keeping petrol subsidy in place would "increasingly favoured the rich more than the poor" and that subsidy could no longer be justified in the face of ‘ever-increasing costs in the wake of drying resources.’ President Tinubu further made it known that the funds that were meant to have been used for payment of subsidy would be used for ‘better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.’ Close to two years after, majority of Nigerians are worse of as a result of the subsidy removal as petrol has gone from around N200 per litre to about N860 per litre and even went as high as almost N1000 per litre not too long ago.

Considering the attendant effects of the petrol subsidy removal on majority of Nigerians as well as sky rocketed prices of commodities since the announcement of the removal by President Tinubu in May 2023, I opined in my earlier article that the argument that petrol subsidy 'favoured the rich more than poor' is arguably in bad taste, not well thought through and hastily arrived, without factoring in the sufferings of Nigeria post fuel subsidy removal. I further noted that while it was not impossible for President Tinubu to have had access to some high-level advisory notes and advised by some seasoned economic advisors/professionals - seated in their air-conditioned office in London, Paris or Washington, without having their boots on the ground here in Nigeria and inability to interact in person with the average person living in Nigeria - where such policies would have direct impacts on one's living costs and standard of living, so as to understand the actual impacts those supposed "economic best practices" would have when applied in Nigeria, leaves a lot to be desired and ought to be reconsidered by President Tinubu going forward. I further noted that the earlier President Tinubu could come to the realisation that he might have surrounded himself with more sycophants only interested in singing his praises but failing to draw his attention to the actual sufferings in the land and the looming disaster that could arise from if citizens decide to resort to self help to address whatever grievances they have against his led government, as a result of the severe hunger in the land and skyrocketed prices of essential goods and services with a lot citizens now struggling to make ends meet and almost without hope, the better it would be for all as a stitch in time will save not just the citizens but also the democratic institutions as well

In my previous article, I equally opined that while President Tinubu ought to have realised that while he might not have been expected to perform magic to better the lives of Nigerians upon his assumption of office as the Nigerian President, he was not expected, at the very least, to have made life harder or even worse for majority of the good people of Nigeria, who are currently bearing the negative impacts of his woeful failure to better citizens lives - no thanks to his anti-people policies. I also asserted that President Tinubu seemed to have forgotten that the welfare of the people, should be the primary foundation of any government policy and where such policy fails the people's test, such is not worth whatever piece it is written on – as (wo)man is the measure of all things.

In the second part of this article, I shall consider the Naira devaluation and floating of the exchange rate of the Naira to the United States Dollar. It is my contention that floatation of the Naira is another economic disaster occasioned by the President Tinubu led administration that has placed a lot more Nigerians in abject penury, increased poverty amongst citizens and worsened the living standards of a great majority. I am not unaware that devaluation occurs primarily when a country creates a downward adjustment of its currency value to balance trade but in the case of our beloved country, the Naira devaluation by President Tinubu not long after he assumed office would appear to have failed in its bid to cure whatever imbalance in trade had. Our currency devaluation would have made sense if we would have increased export and see to a decrease in imports, but sadly, this is not the case in Nigeria. Were President Tinubu to have done his due economic diligence, adequately and robustly consulted the stakeholders as hear back from citizens through perhaps a townhall in almost in the 36 states and the Federal Capital Territory, with a view to understanding how such policy summersault would negatively impact Nigerians, we would, as a sovereign State under God, not be in this sort of economic mess that has arguably spelt doom for a majority of the citizens.

Contrary to assertions in certain quarters that Nigeria’s latest devaluation might be a positive turning point in Nigeria’s currency reform drive, it is argued that President Tinubu’s overhauling policy as announced in his 29 May 2023 address - where he criticised the monetary policy of the Central Bank of Nigeria (CBN) stating that same required a ‘thorough house-cleaning’ was nothing but sweet talks backed by no concrete positive results. In the present author’s view, it would appear the President Tinubu might have spoken too soon and poorly so, as his policy stance or approach to the monetary policy of the CBN would appear not to be working and has seen since then – backfired - with the negative effects largely borne by majority of Nigerians who are left worse of.

Furthermore, it would be recalled that the apex bank announced the unification of all segments of the Foreign Exchange (FX) market – both the official and parallel market sometime in June 2023 and barely 48 hours after the said announcement, it was reported that the Naira fell by close to 36% against the United States Dollars (USD) in the official market – one of the highest ever economic shortfall recorded in the Nigeria’s FX market in a long while.

While there may be some merit to the arguments offered in some quarters about the willing buyer and willing seller approach as well as demand and supply reaction to the FX market, it is the contention of the present writer that that the move made to unify the FX market still failed to bring an end to the multiple foreign exchange markets and rates and if anything at all, has further shown that the volatility of our economy and the FX market itself.

Conclusively and in the considered view of the present author, what President Tinubu ought to have done is to have dealt with the FX backlogs, increase liquidity by encouraging more export driven ventures and conscientiously regulate FX demand through the CBN – statutorily empowered to do so. Quite instructive to note that one of the attendant effects of President Tinubu hurriedly executed Naira floating and devaluation policy is in respect of prices of raw materials and other key items required for production as well as equipment and spare parts – which are often imported, but have since skyrocketed - on account of the Naira devaluation, floatation of the Naira and rising energy costs, thereby, resulting in such production costs being transferred to the end consumer and low purchasing power.

Going forward, President Tinubu would do well to retrace his steps, revisit the policy somersault on Naira devaluation and flotation of the Naira as well as adopt a more home-grown solution that place less reliance on foreign borrowed options or concepts but tailored solutions that best fit a dynamic and unique society like ours with its peculiar challenges.

Joseph Onele, a legal practitioner, writes from Lagos, Nigeria and can be reached via thejosephonele@gmail.com

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