Jide Akintunde, Managing Editor/CEO, Financial Nigeria International Limited

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Subjects of Interest

  • Financial Market
  • Fiscal Policy

One year of President Bola Tinubu 03 Jun 2024

In President Bola Tinubu, Nigeria has had a very agile leader in the last one year. In 2015, the political alliance he midwifed ran on the slogan of “change.” The intent was to have his opposition party, All Progressives Congress (APC), displace the then-ruling People’s Democratic Party (PDP) in Aso Rock Presidential Villa. As President, eight years later, Tinubu has bared his strong intent to change the nation’s fiscal and monetary landscape, political governance, and economic diplomacy.

At his inauguration, he ad libbed the policy decision of removal of the petrol subsidy into his speech, avoiding the debate of the policy. He knew the political misfortune he caused President Goodluck Jonathan in 2012, when he organised a nationwide protest to thwart the administration’s engagement with civic and business leaders as it sought popular buy-in for petrol subsidy removal. As soon as President Tinubu had ended the subsidy 12 years after his public opposition to it, he introduced market exchange rate. Tax reform that essentially pile more tax obligations on the people and businesses quickly followed.

In a businesslike fashion, President Tinubu promptly moved the weekly meeting of the Federal Executive Council from mid-week to Monday, which would enable the government to shape the outlook for each week. He has been superintending the meetings with the large cabinet he put together some three months earlier than his predecessor did in 2015.

Within weeks of his Presidency, President Tinubu assumed the leadership of the Economic Community of West African States (Ecowas), the subregional trade bloc of some African countries located along the eastern coastline of the Atlantic Ocean. Straight away, he took a stance against military coups on the subregion and nearly sanctioned a war against the military government of the neighbouring Niger Republic.

Not since President Olusegun Obasanjo left office in 2007 have Nigerians seen a President of the country engage actively in political and economic diplomacy like President Tinubu has done in this past one year in office. He has been eager to engage international investors and sovereigns, making a case that Nigeria is ready for business. For his first official trip abroad, Tinubu travelled to Paris, France, to attend the Summit for a New Global Financing Pact, hosted by French President Emmanuel Macron. Tinubu, with a large entourage, attended COP28 in Dubai, UAE, the BRICS Summit in India, and continued to lobby some members of the Gulf Cooperation Council (GCC) nations, with the aim of driving inward investments to Nigeria.

As President, Tinubu has been a quintessential Nigerian “action” leader. But his personal and policy agility has delivered, in general, negative results. His fiscal policy has been inflationary; between May 2023 and April 2024, headline inflation increased by 11.28 percentage points. Trying to fight inflation induced by structural and supply coagulation and Tinubu’s policies, the Central Bank of Nigeria has adopted the most hawkish monetary stance anywhere in the world this year, raising its anchor interest rate by 750 basis points between February and April. These policies are accelerating the impoverishment of Nigerians, with millions more people falling below the poverty line. As for businesses, many have experienced quick deaths because of high energy costs, while others are slowly dying as various new taxes are being introduced by the government, compounding the stress of multiple taxation.

While the first year of the Tinubu administration has been disastrous in terms of the welfare of Nigerians, there is the notion that the pains caused by his policies are inevitable in the short term. Over the long term, the lasting gains would, presumably, manifest. If this could become true, the question would still remain: how much pains can the people cope with, and for how much longer? And why does the government think the people would have to continue to bear with it?

The long-term gains could be utopian. Their promise appears to be served on the platter of political repression. Otherwise, Nigerians would have been on the streets, peacefully protesting the unprecedented level of economic hardship in peacetime Nigeria. One of their placards could read: “People and businesses are dying to keep the people in government alive.” This is because senior public officials are unaffected by the government’s long-suffering economic strategy.

However, the truth is that President Tinubu’s unrelenting efforts are being thwarted by the credibility deficit of the election that brought him into office. To make up for it, he is courting powerful politicians, influential financiers, and business leaders with heft. The last two groups are the ones advising his economic policy. Because of, and not in spite of, their advice, his policy pivots are proving unsustainable in the few months of their implementation. For instance, petrol subsidy obligations have returned.

The performance of the administration is also being impacted by the weakness of its economic vision, inadequate planning, and unproductive bureaucracy. For instance, the incremental introduction of new taxes, with the tax on cybersecurity withdrawn before its implementation, indicates the absence of a clear roadmap for achieving fiscal sustainability.

The agility of the President can serve him well in the years left of his first term of office. The occasion of the first anniversary of his administration calls for his sober reflection. Following this, he should become more practical with his economic policy. The requirement is not simply to give it ‘human face.’ His economic policy should become people-centric. He should seek the requisite expertise to help him with it.

Jide Akintunde is Managing Editor, Financial Nigeria publications, and Director, Nigeria Development and Finance Forum.