For many Nigerians, the last year has been marked by renewed suffering as President Bola Ahmed Tinubu’s eight-point agenda fails to tackle rising inflation, unemployment, and a declining Gross Domestic Product (GDP).
Tinubu’s policies, initially presented with great promise, have yet to deliver the expected results, leaving the nation’s economy in turmoil.
From the outset, Tinubu’s administration set a contentious tone with the immediate removal of the fuel subsidy. On May 29, 2023, the President’s declaration, “Fuel Subsidy is Gone,” led to an instant surge in fuel prices from N260 to over N500 per litre. By April 2024, the average fuel price had soared to N702 per litre, according to the National Bureau of Statistics (NBS). This drastic increase has had a ripple effect, contributing to record-high inflation rates.
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The fuel subsidy removal, coupled with the harmonization of the foreign exchange market, saw the Naira plummet to 1339.33 per dollar, further exacerbating inflation. Headline and food inflation reached 33.69 percent and 40.53 percent, respectively, by April 2024, as reported by the NBS. Rising energy costs have compounded the economic challenges for both Nigerians and manufacturers.
In addition to fuel price hikes, Nigerians faced a significant increase in electricity tariffs. On April 3, the Nigerian Electricity Regulatory Commission announced a 240 percent tariff hike for Band A customers, adding to the financial strain on households.
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Despite a subsequent minor reduction, the high cost of living has persisted, with prices of staple foods such as rice, beans, garri, yam, and tomatoes increasing by over 130 percent.
Monetary interventions by the Central Bank of Nigeria (CBN) under Governor Olayemi Cardoso have also struggled to curb inflation. Interest rates were raised three times, reaching 26.25 percent in May 2024, yet inflation continued its upward trajectory. From May 2023, when headline inflation was 22.41 percent, it surged to 33.69 percent within a year, indicating a 11.28 percent increase without effective countermeasures.
President Tinubu’s eight-point agenda, unveiled by Finance Minister Wale Edun, aimed to address food security, poverty, economic growth, job creation, and security, among other issues. However, one year later, these goals remain unmet. Unemployment and underemployment rates stood at 5 percent and 12.3 percent, respectively, in the third quarter of 2023, according to the NBS.
Despite promises of economic transformation, Nigeria’s economic woes have persisted. The government’s initiatives, including plans to restart local refining and cultivate extensive farmlands, have yet to materialize fully. The agricultural sector, despite some job creation claims, continues to struggle with soaring food prices and insecurity.
In the oil and gas sector, while there was a slight increase in crude oil production, the country still battles significant challenges, including oil theft and insufficient investment realization. The Central Bank’s various policy interventions have also had limited success in stabilizing the forex market, with the Naira experiencing extreme volatility.
Experts have criticized the government’s monetary and fiscal policies as reactionary and ineffective. Gbolade Idakolo, CEO of SD & D Capital Management, rated the administration’s economic performance as below average, citing increased business costs and insufficient measures to address inflation. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, acknowledged the necessity of reforms but emphasized the need for better implementation and speed in delivering mitigating measures.
Despite the challenges, there is cautious optimism among some experts. Professor Segun Ajibola, a renowned economist, believes that with proper management and commitment, the administration can still achieve positive economic changes. However, he stresses the importance of addressing key issues such as fuel subsidy removal impacts, foreign exchange market stability, and power sector improvements.
As President Tinubu’s administration enters its second year, the focus remains on implementing effective policies to alleviate the economic hardships faced by Nigerians. The government’s ability to navigate these challenges and deliver on its promises will be crucial in shaping the nation’s economic future.
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