Sir: The bold economic policies introduced by the government of President Bola Ahmed Tinubu have led to a hike in inflation; making it difficult for people to meet their basic needs. The Head Line Inflation Rate rose to 34.19% in June 2024 from 33.95% in May 2024. It has also resulted in large foreign exchange losses for businesses, among other issues.
However, given the state of the economy when the government took office, these measures were necessary. There was a need for transformational, big-bang changes in economic policies, often referred to as ‘’shock therapy’’. The planned protest is unnecessary, as the government is fully aware of the short-term pains the Nigerian people are experiencing and is working around the clock to alleviate it. It is therefore important to highlight some of the major interventions and achievements of the present administration.
The federal government introduced a wage award of N35,000 for federal civil servants, pending the implementation of a new minimum wage. Some state governments followed suit and paid wage awards to civil servants in their states at different rates. The good news is that a new national minimum wage of N70,000 has been approved by the federal government and will be implemented once passed by the National Assembly signed into law by Mr President. The new national minimum wage represents a 133% increase from the current national minimum wage of N30,000. While it could have been more, considerations of affordability and sustainability were taken into account.
The government also made conditional direct cash transfers targeted at millions of households to improve their standard of living. Thousands of metric tons of foodstuffs have also been distributed to alleviate hardship. Many doubt the effectiveness of these interventions; therefore, it is important for the government to conduct independent audits on the efficacy of these intervention programs from time to time.
To deal with the soaring prices of foodstuffs, President Tinubu approved the suspension of duties, tariffs, and taxes for the importation of certain food commodities, including husked brown rice, wheat, maize, and cowpeas, through land and sea for 150 days. He also approved the importation of 250,000 metric tonnes of wheat and maize, respectively. These measures are not intended to undermine the efforts of domestic farmers but to address the issue of scarcity that has led to soaring prices. Many believe that the government should have acted earlier.
The student loan scheme launched by this government is laudable. It will enable children from poor families to attend tertiary education, thereby increasing their chances of having a bright future and making them more useful to society instead of becoming miscreants and a burden and security risk. The introduction of a consumer credit scheme is another great achievement of this administration. This will help stimulate household consumption and the economy as a whole.
The clearance of a $7billion forex backlog by this government has led to increased foreign investor confidence, which is very commendable. The government has also been able to stabilize the exchange rate to a good extent and reduce the arbitrage between the parallel market and the official market. Exchange rate stability is important for businesses as it facilitates proper planning. The government should ensure that this stability is sustained.
The removal of the fuel subsidy, though causing hardship for Nigerians as transportation has become very expensive, has helped free up resources for the government to invest in critical areas of the economy, infrastructure, and security. It has also reduced pressure for borrowing. In the long run, fuel price is expected to decrease as domestic refineries commence production. The government should ensure that domestic crude is supplied to these refineries.
While protests are not the solution to Nigeria’s challenges and therefore unnecessary, there is still room for improvement on the part of the federal government. It should demonstrate care for the plight of the people through its actions and words. The government’s achievements should be properly publicized, emphasizing their importance. Just as the government has intervened in the food crisis, it would also be beneficial for the government to do all it can to reduce the cost of transportation, as it is a major driver of inflation.
•Kenechukwu Aguolu,Abuja.
