Over the past year, Nigerians have faced increased suffering as President Bola Ahmed Tinubu’s eight-point agenda has not effectively addressed rising inflation, unemployment, and a declining GDP.
President Tinubu’s administration has promised improvements, but issues like unemployment, inflation, and GDP remain problematic. His notable “Fuel Subsidy is Gone” statement on May 29 led to the immediate removal of fuel subsidies, causing fuel prices to surge from N260 to over N500 per liter. By April 2024, fuel prices averaged N702 per liter, compared to N254.06 a year earlier.
The combined impact of removing fuel subsidies and harmonizing foreign exchange rates has weakened the Naira to 1339.33 per dollar, spiking headline and food inflation to 33.69% and 40.53% respectively in April 2024. Rising energy costs have compounded economic struggles for both Nigerians and manufacturers.
Additionally, the Nigerian Electricity Regulatory Commission announced a 240% increase in electricity tariffs for Band A customers on April 3. Though tariffs were slightly reduced, Nigerians still face rising costs of goods and services. Basic food prices have soared, with staples like rice, beans, and yams increasing by over 130%.
The Central Bank of Nigeria (CBN), under Governor Olayemi Cardoso, has raised interest rates three times to curb inflation, reaching 26.25% in May from 18.75% in September last year. However, inflation has continued to rise, with headline inflation jumping from 22.41% in May 2023 to 33.69% a year later.
Security issues have exacerbated food price increases, particularly in regions like the Middle Belt, Southeast, Northeast, and Northwest. Despite unveiling a detailed economic roadmap, including food security and job creation, Tinubu’s administration has yet to make significant progress.
CBN’s multiple policy interventions have struggled to stabilize Nigeria’s monetary policy. Although forex backlogs have been cleared, persistent Naira depreciation remains an issue. In the power sector, electricity generation increased to 5,000 megawatts but remains inadequate for Nigeria’s population of around 200 million.
The oil and gas sector has seen slight improvements in crude oil production, yet issues like oil theft persist, impacting revenue. Investment commitments totaling $16 billion have not materialized, and while revenue allocation has increased, the benefits have not been felt in terms of infrastructure or citizens’ well-being.
Agriculture and transportation costs have soared, contrary to government promises. Food inflation hit 40.53% in April 2024, with rising insecurity worsening the situation. Despite claims of creating nearly 60,000 jobs in the agricultural sector, food security remains unaddressed.
Experts criticize the government’s reactive rather than systematic approach to economic policies. Continuous interest rate hikes by the CBN have not curbed inflation, and increased business costs have led to company closures and job losses. Promised measures like CNG conversion kits and operational refineries have not materialized.
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, acknowledges the necessity of Tinubu’s reforms but stresses the need for better implementation to ease their painful impacts. Addressing forex market volatility and fixing economic fundamentals are crucial for sustainability.
Economist Prof Segun Ajibola highlights the importance of managing unintended consequences of policy reforms. For fuel subsidy removal, local refinery maintenance, private sector investment, and tackling oil theft are essential. In the foreign exchange market, reducing supply rigidities and promoting local substitutes can help. Efforts should also focus on improving power generation, transmission, and distribution to meet electricity needs.
Overall, while Tinubu’s administration has laid out ambitious plans, significant challenges remain. Experts urge the government to adopt people-oriented policies and address pressing economic issues to improve the well-being of Nigerians.
