Barely five months since President Bola Tinubu assumed office, the Nigerian economy has maintained an accelerated downward trajectory – resulting in public outcry. Inflation has risen to 27.33%, triggered by some of the president’s economic reforms, including the fuel subsidy removal and the floating of the FX market.
The backdrop of the soaring cost of living, against the meager earnings of about $30 monthly minimum wage in Nigeria, is increasingly fueling the public outcry. Coming from eight years of what many have described as the worst leadership in Nigeria, under former President Muhammadu Buhari, the Nigerian people can’t wait for economic relief under the new government.
Alas, the Tinibu administration, under intense pressure to ameliorate people’s suffering, is beginning to cry out.
On Monday evening, in Mecca, Saudi Arabia, Tinubu said that his administration inherited serious liabilities from the previous government but assured that he would not make any excuses.
This is as the President has advanced negotiations concerning a multi-billion dollar infrastructure finance facility from the Islamic Development Bank to fund a multi-sectoral portfolio of infrastructure projects at the federal and sub-national levels in Nigeria.
President Tinubu in a statement issued by his Special Adviser on Media and Publicity, Chief Ajuri Ngelale said: “We have serious deficits in port infrastructure, power infrastructure, and agro-allied facilities that will enable sustainable food security in our country. These deficits present an unrivalled opportunity for savvy investors in a market that is by far the largest on the continent.
“We inherited serious liabilities, but also assets from our predecessors. We do not make any excuses.”
The president’s declaration found reinforcement in the remarks of the National Security Adviser, Nuhu Ribadu. Speaking at the Chief of Defence Intelligence Annual Conference 2023 in Abuja, where he addressed leaders under the theme “Leveraging Defence Diplomacy and Effective Regional Collaboration for Enhanced National Security,” Ribadu asserted that the current administration inherited an economically challenged and depleted financial situation.
In his speech, Ribadu did not mince words, stating, “Yes, we’re facing budgetary constraints. It is okay for me to tell you. Fine, it is important for you to know that we inherited a difficult situation, literally a bankrupt country, no money, to a point where we can say that all the money we’re getting now, we’re paying back what was taken. It is serious!”
At the same time, the governor of the Central Bank of Nigeria (CBN) confessed that the financial regulator does not have the “magic wand” to change the nation’s current economic dynamics.
“The CBN does not have a magic wand that can be waved at the current economic challenges,” he said.
While several economists have admitted that Tinubu’s administration inherited a deplorable economic situation from Buhari, they have expressed concern that the growing outcry from the present government signals cluelessness.
Although Tinubu said he was not making excuses by voicing out the poor state of the economy, the Nigerian masses bearing the brunt are seeing the complaints as a sign that his administration lacks the wits it takes to revive the economy.
One focal point of criticism is the administration’s reliance on loans to mitigate revenue shortfalls – which is largely tied to the crisis in the oil sector – the nation’s major means of revenue generation. Another notable factor is the extravagant utilization of borrowed funds. In a recent revelation, the 2023 Supplementary Budget was identified for its opulent expenditures earmarked for public officeholders. This includes allocations running into multibillion naira for activities such as building renovations, the acquisition of luxury cars, and even the purchase of a yacht.
The president’s trip to Saudi Arabia involves seeking financial assistance from the kingdom and lenders. The presidency announced that Tinubu secured Saudi’s commitment to provide funding to boost Nigeria’s ailing foreign exchange market, and he also entered advanced negotiations with the Islamic Development Bank for a multi-billion dollar infrastructure finance facility.
These are in addition to other multibillion-dollar loans secured since Tinubu assumed office. Critics argue that he is mirroring the approach of his predecessor, who embarked on a borrowing spree that skyrocketed Nigeria’s public debt stock to N87 trillion, without tangible results to justify such borrowing.
As the economic challenges persist, Tinubu’s administration’s responses determine its readiness to navigate the delicate balance between addressing inherited issues and demonstrating effective leadership to steer the country toward recovery.
