Nigeria’s Economic Woes Deepen: One Year Assessment of Tinubu’s Administration

One year into President Bola Ahmed Tinubu’s administration, many Nigerians are grappling with severe economic hardships. Despite Tinubu’s ambitious eight-point agenda, the country faces escalating headline and food inflation, rising unemployment, and a declining GDP.

Tinubu’s tenure began with bold promises, yet results have been lacking. His “Fuel Subsidy is Gone” statement on May 29 set the stage for immediate policy shifts, including the removal of fuel subsidies, which saw petrol prices surge from N260 to over N500 per litre. According to the National Bureau of Statistics, the average fuel price skyrocketed to N702 per litre in April 2024, up from N254.06 the previous year.

The fuel subsidy removal and foreign exchange market harmonization led to the naira depreciating to 1339.33 per dollar, exacerbating inflation. Nigeria’s headline and food inflation hit record highs of 33.69% and 40.53% respectively in April 2024. Rising energy costs have compounded the economic woes for both citizens and manufacturers. A 240% electricity tariff increase for high-usage customers announced by the Nigerian Electricity Regulatory Commission in April 2024 further strained households.

The Central Bank of Nigeria (CBN), under Governor Olayemi Cardoso, has raised interest rates three times, pushing the Monetary Policy Rate to 26.25%. However, inflation remains untamed, increasing from 22.41% in May 2023 to 33.69% in May 2024.

Tinubu’s eight-point agenda, unveiled by Finance Minister Wale Edun, aimed at food security, job creation, access to capital, and inclusivity, has yet to yield tangible benefits. Unemployment and underemployment rates stood at 5% and 12.3% respectively in Q3 2023, with persistent inflation undermining purchasing power.

Despite increased FAAC revenue, infrastructural development remains insufficient. The Central Bank’s interventions, including forex backlog clearance, have not stabilized the naira or curbed inflation. Electricity generation increased to 5,000 megawatts, but power supply remains inadequate for the population of 200 million.

The oil and gas sector faces challenges despite slight production increases. The administration’s reported $16 billion in investment commitments has not yet materialized. Food prices and transportation costs continue to soar, contrary to the government’s food security goals.

Experts criticize the government’s reactionary policies. Mr. Idakolo Gbolade of SD & D Capital Management noted the failure to listen to expert advice, resulting in economic pressures and increased hardships. Similarly, Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, emphasized the need for timely mitigation measures to ease the pains of reforms.

Despite these challenges, there is optimism that the government can reposition the economy. Prof. Segun Ajibola, former President of the Chartered Institute of Bankers, highlighted the need for managing unintended consequences of policy reforms and emphasized the potential for positive changes if issues like local refinery maintenance and power supply improvements are addressed.

As Nigerians endure these economic trials, the call for more aggressive, people-oriented policies grows louder. Tinubu’s administration must urgently address these issues to restore confidence and improve the well-being of the nation.