Jide Akintunde, Managing Editor/CEO, Financial Nigeria International Limited
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- Fiscal Policy
Tinubu gets what he wants, promises Nigerians all we want 05 Jun 2023
President Bola Ahmed Tinubu had nursed his presidential ambition for many years. That he became president just at his first run for the office speaks to the success of his artful political strategy. But since his predecessor, former President Muhammadu Buhari, who actively pursued his own presidential ambition for over a decade before he was elected in 2015, still came disastrously unprepared, President Tinubu’s inaugural address was expected to provide an inkling of his own preparedness for the presidency.
The speech was excellent in its identification of the multifarious issues that the new administration will confront. They are issues that Nigerians have faced for years. Because of decades of no appreciable progress, the challenges have pushed a majority of the citizens to the margins of existence. National disunity, poverty, lack of electricity, poor infrastructure, elevated inflation, high interest rate, social vulnerabilities, and, more recently, widespread insecurity, and investor apathy. President Tinubu promises to tackle them all.
The political stump speeches of the last campaign cycle hardly offered the breadth of the promises in President Tinubu’s inaugural. He must have been elated. He has achieved his long-term ambition. And, in a generous mood, he offered to help Nigerians realise all of theirs.
Despite offering variegated directions for economic policy, the speech was essentially political. Except for the fact that Tinubu’s victory is still being challenged in court, the election is over now. It is time to face the demanding tasks of effective policymaking and good governance. Here, political wishes and practical policy actions don’t usually agree.
Without a doubt, the good political tone of the speech was important. The President promised to give attention to nation-building. He offered an olive branch to his political opponents and advised on a mutually beneficial relationship between the North and the South of the country whose division has widened in the past years. Although lacking in rhetorical flourishes, his speech tried to lift the national spirit, enjoining citizens to push for the country’s “ideals.”
In his gushy mood, the President overcommitted on the economic front in a manner that did not seem realistic. Afterall, what he has is a four-year mandate. There is only so much that can be accomplished in that short period. For instance, he promised to make electricity more “accessible” and “affordable”, to businesses and homes “alike.” The reality in the Nigerian Electricity Supply Industry is that tariffs are still quite low, acting as a disincentive for investment in the sector. Public intervention to increase access and affordability would entail the provision of subsidy on both supply and demand sides. Nevertheless, such subsidies would have been poorly targeted if they seek to benefit businesses and homes in the same or similar way, assuming they can be readily financed.
Incidentally, the President made a decisive call on ending the decades-old, mistargeted, and corruption-laden petrol subsidy regime. The last administration railroaded its successor into ending the subsidy by not making provision for its bloated cost for the second half of the year in the 2023 budget. Additional pressure has also come from international financiers who insist that, in the face of the country’s high debt burden, it could no longer afford the subsidy. Yet, the options before the new administration include waiting to make adequate plan to cushion the effect of subsidy removal on especially poor citizens.
These issues highlight the high need for competence in policymaking by the new administration. As well, monetary policy, infrastructure development, and foreign policy – areas where the President also wants to make positive impacts – require technocratic competence. With the fuel subsidy ending immediately, President Tinubu needs to bring in the expertise quickly. To avoid inflationary growth, the new administration cannot delay on the coordination of monetary and fiscal policy. His big plans for jobs, through investment in tech, infrastructure, light industry, education, healthcare, and social safety nets require immediate action to halt and reverse the upward trajectories of unemployment and poverty. More importantly, these programmes must be driven by expertise – not politics – in order to succeed.
President Tinubu has piped a conciliatory tune to Nigerians and international investors. It is left to be seen if the people would dance to the tune. If the court decides to keep him in office, it makes sense for citizens to support him. Such support is in the interest of the people and the country. It is important to give a good chance to efforts to redress the ills of the past eight years. In a democracy, this does not preclude a robust but peaceful opposition. The speech asserts that Nigeria’s democracy is in word and deed.
The tests of the fidelity of President Tinubu to the lofty democratic and nation-building ideals, market-oriented policies, and development goals he enunciated will come, thick and fast. Many notable Nigerians were tellingly absent at his inauguration. Investors would be looking for policy actions to back the pronouncements. Certainly, the President would have to be persistent in his outreach. None of the goals he has put forward are achievable overnight. The easiest part is talking about them and that has been, overall, fairly well done.