Bola Tinubu took over as Nigeria’s president and pledged to scrap a costly fuel subsidy, address widening insecurity and revive Africa’s largest economy.

The 71-year-old former state governor was sworn in at a ceremony in the capital, Abuja, on Monday. He succeeds Muhammadu Buhari, who stepped down after two terms, and inherits a daunting list of problems to tackle in the continent’s most-populous nation. 

“We have endured hardships that would have made other societies crumble,” Tinubu said after taking the oath of office.

The president said his administration will target an economic growth rate of at least 6% a year, as it seeks to end a system of multiple exchange rates and reduce interest rates to boost consumption. He also committed to doubling electricity generation and make it simpler for foreign investors to repatriate their profits.

Since Buhari, 80, came to power in 2015, Nigeria’s public debt has increased seven-fold to about 77 trillion naira ($166 billion), according to the country’s Debt Management Office. Servicing those obligations consumed 96% of government revenue in 2022 and the figure could top 100% this year. That’s left the government reliant on ever-greater borrowing and widening deficits to run the state.

Tinubu didn’t mention the ballooning debt burden in his speech.

Inflation that’s at an 18-year high is meanwhile raising the cost of living in a country where 40% of the population live in extreme poverty and one in three people are unemployed

Security Investment

And though Buhari’s administration made some progress containing jihadist groups in northeastern Nigeria, armed gangs that have been blamed for carrying out mass killings and kidnappings have proliferated in other parts of the country.

“We shall defend the nation from terror and all forms of criminality that threaten the peace and stability of our country,” Tinubu said, committing to invest in recruiting more security personnel and better military equipment.

The president welcomed Buhari’s decision to provide for only six months of gasoline subsidies in this year’s budget – an intervention that cost more than $10 billion last year and dwarfed spending on education and health.

“The fuel subsidy is gone,” he said, stating that it “can no longer justify its ever-increasing costs.”

It’s unclear what will happen to the pump price on June 1, as phasing out the payments will significantly increase transport costs and previous attempts to remove them have triggered social unrest.

While Tinubu takes the helm after receiving the lowest vote share of any winner in a presidential election since the restoration of democracy 24 years ago, he will have room for maneuver. The ruling All Progressives Congress kept its majorities in the Senate and among state governors, though it no longer commands one in the House of Representatives.

In his election manifesto, the incoming president promised to grow the nation’s tax take — which is among the weakest in the world — and cut Nigeria’s exposure to loans denominated in foreign currency. He also said his government will boost daily oil output in Africa’s largest crude producer by more than 60% over four years to 2.6 million barrels.

A federal court has yet to rule on petitions filed by the runners-up in February’s presidential election against Tinubu’s victory.

Bloomberg