NIGERIA’S ECONOMY UNDER Tinubu: One Year After

One year after President Bola Tinubu assumed the position of president of the Federal Republic of Nigeria, Nigeria has probably experienced more economic moments of truth than there has ever been in the country’s 64 years of independence.
So dramatic have events been over the past 12 months that many economic and political observers are entertaining the notion that the events of this regime might turn out to be a watershed for the nation’s history, especially for Nigeria’s downtrodden and most vulnerable.
For the purpose of perspective, at the twilight of the Buhari Administration in May 2023, Nigeria’s headline inflation stood at 22.41 per cent. Food prices increased by 24.82 per cent at the same time, with notable rises in oil/fat, yam, bread/cereals, fish, and vegetables. Today, just one year on, headline inflation stands at 33.20 per cent, and food inflation circa 40. The price of a bag of rice rose from N28,000 at the dusk of the last administration to N90,000 three months ago, but currently hovering around N65,000.
As of the same time, a kilowatt hour of electricity was N68. Today, at least for Band A customers, a kilowatt hour of electricity is N225 per kilowatt hour.
According to the National Bureau of Statistics (NBS), the average retail price paid by consumers for Premium Motor Spirit (Petrol) in May 2023 was N238.11. On state profile analysis, Imo State had the highest average retail price for petrol with N300.00, followed by Gombe with N299.77 and Jigawa with N297.50. On the other hand, Abuja recorded the lowest average retail price for Premium Motor Spirit (Petrol) with N195.00, followed by Niger with N201.82 and Plateau with N203.33.
In addition, analysis by zone showed that the South-East recorded the highest average retail price in May 2023 with N256.64, while the North-Central had the lowest with N208.74. Today the average price of a liter of petrol is N785.
In May 2023, the average price of a 50kg of cement hovered around N3000. Today, after the federal government’s palpable intervention, the price of a bag of cement fluctuates between N8000 and N9000, having topped N13, 500 in February this year.
Some observers blame the policies of the federal government for the increase. Recall that in 2023, the Cement Producers Association of Nigeria (CPAN) warned that the ongoing plan of the federal government to introduce concrete roads will raise the price of cement to N9,000 per bag.
At the twilight of the Buhari administration, the price of a 50kg bag of cement was N3000.
Nigeria Exchange Rate against USD averaged 460.702 (USD/NGN) in May 2023, compared to 460.418 USD/NGN in the previous month. Today, the official exchange rate hovers around N1,450/$
The dark side of the developments is that it is mostly hurting Nigeria’s 135 million multi-dimensionally poor who the government’s promised subsidies removal were supposed to benefit. On the other hand, the political elites seem to be living fat while the burden of tax continues to heap and impact more and more on the poor.
In fairness to Tinubu, he hadn’t extensively detailed his economic strategy to Nigerians leading up to the presidential election, aside from the pledge to terminate fuel subsidies. Following the trend set by the former President Muhammadu Buhari’s administration, which heavily relied on borrowing to sustain governance, many Nigerians had embraced the idea of ending subsidy payments. However, Tinubu’s sudden and haphazard approach took everyone by surprise. Nigerians had anticipated a focus on addressing the high cost of governance and streamlining the bureaucratic system.
Each year, more than 65 per cent of the budget is allocated to recurrent expenditure, largely driven by the extravagant lifestyles of top political figures in both the executive and legislative branches.
Transitioning from Buhari’s borrowing model, Tinubu’s administration immediately ramped up spending upon assuming office last May. His initial budget, a supplementary one totaling N2.17 trillion, inflated the 2023 expenditure to N28.17 trillion. This budget prioritised the acquisition of luxury items and extravagant projects. Notably, the allocation of N1.9 billion for SUVs for the First Lady’s office, an entity not constitutionally mandated, raised eyebrows.
Furthermore, the federal government set aside N2.9 billion for SUV replacements labeled as “operational pool vehicles.” Aso Rock’s new occupants included significant sums for renovating presidential and vice-presidential residences.
The spending extended to various projects aimed at providing luxury for top officials, including digitisation initiatives, office constructions, and renovations of official residences.
A particularly egregious example of misallocation of public funds occurred when the senate president, Godswill Akpabjo, announced a month-long holiday for the senate shortly after barely two months of work, accompanied by an incident involving mistaken claims of payment for adjournment.
The abrupt 250 per cent increase in public power supply tariffs, amidst soaring food and general inflation rates, finally spurred organised labour, civil society, and students into action. However, the Tinubu administration appeared disconnected from the dire poverty gripping the nation, as evidenced by its consideration of introducing new taxes and enforcing previously dormant ones.
The introduction of the Cybersecurity Levy coincided with discussions about raising the Value Added Tax (VAT) rate from 7.5 per cent to at least 10 per cent, with proposals suggesting a hike to 15 per cent. Proponents argued that such increases were necessary to enable the federal government to cover its fiscal deficit and service its debt obligations.
Noteworthy is a quote from a former British Prime Minister, Magaret Thatcher, who said, “No nation ever grew more prosperous by taxing its citizens beyond their capacity to pay.”
Assessing the performance of a leader one year into office requires a comprehensive analysis of various factors, including economic indicators, social welfare, governance reforms, and public perception.
Commenting, the chief executive of AntHill Concept Limited, and Member of the Board of Economists, NATIONAL ECONOMY, Dr. Emeka Okengwu, stated that the performance of Tinubu administration is being perceived from the international community, captains of industries, and the everyday Nigerian. He said while the economy is biting Nigerians, the international community and many captains of industry believe that President Tinubu is on the right track of economic recovery. “I believe the economy is ‘Work-in-Progress,’ he said.
The president, Independent Shareholders Association of Nigeria (ISAN), Moses Igbrude, acquiesced. He further said on paper, the policies of the Tinubu administration are good, but it is taking time to impact the common man. He called for increased social investments, including food assistance for the most vulnerable.
A Development Economist, and Dean at Adeleke University, Professor Tayo Bello, told NATIONAL ECONOMY that following the enforcement of the new policies of the Tinubu administration, which Nigerians are not used to, hardship has engulfed the land. He said the government needs to assure the masses that the new policies will benefit them in the future. He added that the way to do that is to run the government in a transparent manner that will make them feel they are not the only ones making the sacrifice.
Noting that the federal government had promised to use proceeds from subsidies removal, retired lecturer of Economics, Lagos State University, Dr. Tunji Olaleye, said, “The government’s ability to address social welfare issues such as healthcare, education, housing, and poverty alleviation would also be closely monitored.
“Progress in these areas, such as improved access to healthcare and education, affordable housing initiatives, and poverty reduction programmes, would be welcomed by the populace. Conversely, if there is little or no improvement in social welfare indicators, the government may face criticism for its failure to prioritise the needs of the people.”
Also, a political economist, and chief strategist at Easy Invest, Dr. Samuel Jakpor, said Nigerians would likely scrutinise President Tinubu’s economic policies and their impact on key indicators such as GDP growth, inflation, unemployment, and foreign direct investment.
He said positive economic growth, coupled with efforts to tackle inflation and unemployment, would generally be seen as indicators of success. However, if economic conditions worsen or fail to improve significantly, there may be concerns about the effectiveness of the government’s economic agenda. “So far, this administration has not had a positive impact on the lives of Nigerians yet. For now, we can only hope for the better,” he said.