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Tag: Tinubu’s economic policies

  • Alake seeks northern elites’ support for Tinubu’s economic policies

    Alake seeks northern elites’ support for Tinubu’s economic policies

    The Minister of Solid Minerals Development, Dele Alake, has called on northern elites to support President Bola Ahmed Tinubu’s economic policies aimed at revitalizing Nigeria’s economy and fostering national development.

    Alake made the appeal in Kaduna after receiving the Most Impactful Minister award from the Arewa Think-Tank, a northern socio-cultural group.

    In a statement issued by his Senior Special Assistant on Media, Segun Tomori, the minister urged northern leaders to back Tinubu’s programs, emphasizing that they are designed to drive economic recovery and long-term national growth.

    He acknowledged the hardships arising from the administration’s policies but urged Nigerians to see them as necessary sacrifices to secure a better future for coming generations.

    According to him, citizens of developed nations also endured similar challenges to achieve prosperity.

    Alake reaffirmed that the Tinubu administration’s policies are focused on empowering citizens by creating wealth opportunities and addressing systemic inefficiencies that have hindered the country’s development.

    “He has taken the battle to the profiteers of the subsidy regime in the downstream petroleum sector, cabals who took advantage of the cheap fuel meant for the masses to become rich by smuggling them across the border. Now that the margin has become unprofitable, he has taken the elephant from the room. You can bet that the next challenge of bringing down the cost has already started with the resumption of petroleum production at the Port Harcourt refinery. it is a testimony to his doggedness to put smiles on the faces of the masses at all cost, he said. 

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    On the award, the minister attributed his achievements to the collaborative governance approach championed by President Tinubu, which he claimed fosters synergy across ministries.

    According to him, “The achievements of a single minister are the result of teamwork and collaboration across ministries.” Adding that, “singling a minister out as the most impactful may not tell the full story as the success of each minister is the result of the collaboration of many ministries.

    He cited the establishment of the Mining Marshals through the joint efforts of the ministries of Interior and Defence and the success of marketing the mining sector abroad through the support of ministries of foreign affairs, trade and investment as evidence of Tinubu’s style of governance in action.

    Alake took the audience including Kaduna State Governor, Senator Uba Sani, former Defence chief, Retired General Martin Luther Agwai, former Kaduna State Governor Ramalan Yero and Special Adviser to the President on Public Communications Sunday Dare down memory lane by chronicling the remarkable feats of President Tinubu as senator in the Third Republic and Lagos State Governor between 1999 and 2007.

    He said: “As governor, he (Tinubu) brought his skills as a visionary development strategist and financial tactician to the governance of Lagos. He restructured the domestic economy to create wealth for those who could take the risk and welfare for those left behind. His 25-year projection for the Lagos state economy has recorded a roaring success and given birth to a new economic template. If Lagos is working, Nigeria, in his hands, is destined to work better.”

    Chairman of the occasion, General Martin Luther Agwai (rtd) urged the government to prioritise agriculture in view of the threats posed by climate change and insecurity.

    Governor Senator Sani Uba, who represented other governors from the region, commended the Arewa Think-Tank for its consistency. 

    He listed several achievements of his administration in agriculture, concluding that the conditions of living of farmers in the state have improved due to the policies.

    In a poignant moment, the Special Adviser to the President on Media & Public Communications, Chief Sunday Dare reiterated in Hausa the achievements of the Tinubu administration emphasizing that it needs the support of all citizens to succeed. 

  • Presidency defends Tinubu’s economic policies, slams Atiku

    Presidency defends Tinubu’s economic policies, slams Atiku

    The Presidency on Sunday fired back at former Vice President Atiku Abubakar for his recent critique of President Bola Ahmed Tinubu’s economic policies and administration, saying Atiku is out of touch with Nigeria’s realities and engaging in “grand illusions and fantasies.” 

    Atiku, last Monday, in a lengthy statement he titled “What we would have done differently” took a scathing critique of President Tinubu’s programmes and policies targeted at revamping the economy, insinuating that the policies were wrong and not well thought out. 

    However, in a statement by Special Adviser to the President on Information and Strategy, Bayo Onanuga, the Presidency discarded Abubakar’s ideas, saying he had “shown more interest in undermining President Bola Ahmed Tinubu than in addressing his party’s implosion”, accusing him of envy for President Tinubu. 

    Waving off the attempt by the presidential candidate of the opposition People’s Democratic Party (PDP) in the 2023 elections to undermine Tinubu plans and policies, the statement underscored the administration’s defense of its reform agenda, particularly the removal of fuel subsidies, which it said has helped avert a looming fiscal crisis.

    “In 2024 alone, the removal of the fuel subsidy is projected to save Nigeria N5.4 trillion. These funds, which would otherwise have been wasted, are being channeled into critical infrastructure development and social intervention programs that will benefit all tiers of government and improve the lives of Nigerians”, it said. 

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    Atiku, who lost the 2023 presidential election to Tinubu, suggested that he would have taken a more consultative approach to tackle Nigeria’s economic challenges. 

    However, the Presidency dismissed his proposals as unrealistic and out of touch, asserting that Atiku has “failed to reckon with the decades of mismanagement” inherited by the Tinubu administration.

    “It is perplexing that he would elevate his untested, hypothetical proposals, which Nigerians soundly rejected during the 2023 Presidential Election, and seek to present them as superior to the multi-faceted reform programs implemented by the Tinubu administration,” the statement continued. 

    “If his plan lacked popular appeal then, he must acknowledge that repackaging it now will not resolve the social and economic challenges his People’s Democratic Party (PDP) bequeathed after 16 years in power”, the statement said. 

    It further asserted that the subsidy removal, widely regarded as a politically risky move, has laid the groundwork for a more sustainable fiscal environment, saying “as of mid-2023, the landing cost of fuel was between N500 and N600, while it was sold nationwide at an average of N200. The 2023 budget allocated N3.36 trillion for fuel subsidies until June, against a projected N2.23 trillion in oil revenue for the year. The Nigerian state was on life support.”

    The Presidency also pointed to what it described as Atiku’s “hypothetical and fabled presidency” and criticized his proposed “consultation period” for showing a lack of urgency. 

    “What reforms would Atiku propose at the onset of his hypothetical presidency?” the statement asked, adding “while he suggests a consultation period upon assuming office, the reality is that the Nigerian economy requires immediate and decisive action. A leader must be prepared to tackle challenges from Day One, as President Tinubu has done.”

    The Presidency continued to outline several areas where Tinubu has achieved significant progress, including improvements in revenue generation and social welfare programs. 

    It credited Tinubu’s reform policies with nearly doubling revenue from the Federal Inland Revenue Service (FIRS) in the first half of 2024, compared to levels in 2023, and highlighted wage increases in several states as evidence of the administration’s impact on the economy.

    “We expect Atiku to commend what the Tinubu administration has done concerning revenue generation for the Federation,” the statement said, adding “without factoring in oil sales, revenue proceeds generated by the Federal Inland Revenue Service almost doubled in the first half of 2024, compared with the level Tinubu met in 2023. The states and councils are more prosperous because of it, as many states have increased the minimum wage for their workers to between N70,000 and N85,000.”

    In addition, the Presidency dismissed Atiku’s suggestion to privatize Nigeria’s four government-owned refineries, calling it “unoriginal” and inadequate to meet the country’s fuel needs. 

    The statement contrasted Atiku’s approach to Tinubu’s plan, which focuses on revitalizing the nation’s refining capacity through private sector management while retaining government ownership. 

    “The model of farming the completely rehabilitated refineries to private sector managers at an agreed-upon rate of return to the government is more practical and value-laden than selling our national patrimony to private interests that are not technically capable of operating the refineries,” the statement noted.

    The Presidency also took aim at Atiku’s record as vice president, particularly in his role in the privatization of public assets, alleging that assets sold under Atiku’s tenure as Vice President have since been stripped and turned into “dead assets,” contrasting that record with Tinubu’s focus on retaining and developing assets for long-term growth.

    “Today, most public enterprises Atiku sold have been stripped and become dead assets,” the statement said, adding that Tinubu’s model is intended to stabilize domestic production and retail prices while reducing foreign exchange challenges. 

    This approach, the statement argued, “will guarantee domestic production and stabilize retail prices by reducing foreign exchange challenges. It includes selling crude oil to the refineries in Naira, enabling potential cost reductions that could reflect in retail prices.”

    The Presidency also criticized Atiku’s proposals around foreign exchange management, labeling his preference for a “managed float” exchange rate as outdated and problematic. 

    “Atiku’s managed float proposal, another gradualist approach, is still the same as the old fixed exchange rate system, which stagnated the national economy by subsidizing forex up to $1.5 billion monthly to a privileged few. Atiku should remember that a managed float is also known as a dirty float because of its inherent flaws. The system combines elements of fixed and floating exchange rates, with access not guaranteed to all”, it said. 

    The Presidency also addressed what it described as Atiku’s unfounded allegations of corruption within the Nigerian National Petroleum Corporation (NNPC), arguing that the subsidy had historically been a significant enabler of corruption. 

    It further pointed to allegations of corruption involving Atiku himself. 

    “During his eight-year tenure as Vice President, Atiku and his boss had an opportunity to address this issue but failed to make any significant reforms in the oil sector,” it said, adding “is it not ironic that an Atiku, who was entangled in corruption allegations, including one in which his wife was indicted and his business associate, former US Congressman William Jefferson, was jailed for 13 years, is now talking about corruption matters?”

    Concluding its response, the Presidency called on Atiku to abandon what it described as “the petty, derisive politics of a sore loser” and focus on a constructive approach to Nigeria’s challenges. 

    “President Tinubu remains focused on leading Nigeria toward a prosperous future and addressing our nation’s real challenges. Atiku Abubakar should abandon his politics of distraction and fantasies and focus on constructive discourse,” the statement reads

  • Why Tinubu’s economic policies will help the naira

    Why Tinubu’s economic policies will help the naira

    By Abiola Yusuf 

    With the reforms embarked upon by the administration of President Bola Tinubu in the financial and the petroleum sectors, the naira is set to return to its glory days. Before May 29, 2023, everyone knew that the nation’s financial and petroleum sectors needed immediate surgical reforms in order for the country not to go bankrupt or pariah.

    However, immediately President Bola Tinubu was sworn in, his administration started surgical economic moves such as ending the decades-long fuel subsidies that favoured the rich although the decision more than doubled the price of Premium Motor Spirit (PMS), causing a sharp spike in prices of food and other essential commodities; but it is an action supported by all Nigerians, home and abroad.

    Nigerians believed that fuel subsidy benefits only the rich while poorest of the poor benefits nothing from the bazaar. In fact, the policy was killing the nation’s economy because fuel subsidy payment diverted part of the resource for developmental purposes towards consumption. In other words, the resources that should have gone into infrastructure, education, health, and security with positive externalities were going into consumption.

    The ever-growing fuel subsidy bills hit deep into government resources. With revenue shortage, fuel subsidy payment meant the government needed to borrow to invest in other aspects of governance.

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    Another policy was the floating of the naira (unification of exchange rate). For many years, the financial sector had been calling for the reform of Nigeria’s forex market to engender liquidity and price discovery. 

    A liquid and transparent forex market is a key requirement for capital formation and economic growth. Sadly, in the last couple of years, Nigeria faced a major forex crisis which stifled economic growth and dented investor confidence. 

    But, on June 8, 2023, the CBN announced the merging of all forex windows into NAFEM (previously NAFEX) with a removal of the hard peg on Naira trading within the official market; hence the foreign exchange market became liberalised and it became one of a willing buyer and willing seller.

    These two reforms- fuel subsidy removal and unification of exchange rate – though painful, have not only helped the nation stand on its feet economically, it has also saved the nation several billions of naira that were, hitherto, going to private pockets.

    These few private individuals who were smiling to the banks, maintaining huge account balances while the masses were being pushed further down into poverty line daily, lost the privileges they once enjoyed and sanity was restored to the petroleum and financial services sectors.

    For instance, after the reform of the forex market, the devaluation and unification brought an end to the multiple foreign exchange markets and rates, which have dis-incentivised business activities and deterred foreign investments.

    Also, multiple exchange rates, hitherto used by businesses, have been a source of confusion for investors. When they bring in funds at the official exchange rate and can only repatriate their earnings at the black-market rate, they make conversion losses on their investments. Investors recognised that a unified exchange rate would help alleviate these problems and improve the ease of doing business in Nigeria.

    The unification of the exchange rates would in the end prop up investors’ confidence in the Nigerian markets because the country has been struggling to attract foreign direct investment (FDI) in the last few years, with investment falling by as much as 90% since 2008 but with the foreign exchange unification, an improvement would likely be noticeable in the coming months and steadily gain traction beyond that. 

    This is because FX challenges are top on mind for multinational companies bringing FDI into Nigeria. Their inability to repatriate earnings in full has kept FDI below its potential, with inflows to smaller neighbours like Ghana outpacing Nigeria’s in recent years. Also, FX has been a key problem driving a handful of companies to divest in recent years.

    As it is, the move of the CBN to clear backlogs are also yielding positive result because investors would like to see an improved level of forex liquidity and positive market signalling to fully accept Nigeria as the alluring investment destination it once was. After all, Nigeria remains a potential investment haven. The strong, youthful population and the diversified nature of its economy with various untapped natural resources make Nigeria an attractive economy cum investment opportunity. 

    Many sectors within the country are still in their infancy, hence there is room for much growth. Nigeria’s per capita consumption of so many items underscores the huge investment potential there is. 

    It is a no brainer that the two reforms have ended sleaze and analysts have applauded President Tinubu, saying the economic policies introduced to cushion the effect of the two policies on the citizens would reposition the economy and in the long run, make the value of the naira stronger as well as return it to its glory days.

    Also noteworthy is that the federal government is working closely with states and local governments to implement interventions that will cushion the pains. Some of the interventions include the provision of one billion naira ($1.16 million) credit to each of 75 manufacturing companies over the next year and the provision of 125 billion naira ($145 million) in the form of grants and loans to small, medium-sized enterprises and other businesses in the informal sector.

    The government also ordered the release of 200,000 metric tons of grains to households across the country to help stabilize the price of food while 225,000 metric tons of fertilizer, seedlings and other inputs are being provided to farmers. At least N200 billion ($232 million) would also be invested in agriculture to boost farming.

    The federal government is also negotiating a new salary structure with civil servants.

    There is therefore, no gainsaying that Nigeria’s foreign exchange market will perform better as global indices have shown that things would improve. The steps taken by President Tinubu and the CBN may be inconvenient in terms of the fluctuation, it is believed that it will stabilise and get better because countries that have chosen this route before now have done better on average in the long-run.

    • Yusuf is a Lagos-based public affairs analyst.