President Bola Tinubu is one year in office today. It is a milestone that evokes serious reflections, given the electoral promises of every occupant of that office and the country’s existential challenges that need to be tackled. A juxtaposition of the two extremes in one year of this administration leaves no one in doubt of a chasm that is apparently galling.
The administration has noticed this incongruity, gauged the public mood and decided to make the anniversary low-key – a revelation the Minister of Information, Mohammed Idris, made. As Tinubu marks one year in office, what may easily and cynically come to many minds could be that off-the-cuff and thunderous declaration, “fuel subsidy is gone,” to the cheers of Bretton Woods institutions, the infamous deities of market-driven economy. The liberalisation of the foreign exchange market followed. These two policies sparked a perfect storm for the economy.
Inflation, their ineluctable consequence, has since then become a bull in a china shop. Insecurity, lopsidedness in political appointments, transparency deficits in governance and disregard for the 1999 Constitution, have equally soared to dwarf Tinubu’s eight-point Renewed Hope Agenda.
To be fair, he inherited an economy on the brink of total collapse, which he was desperate to change. For instance, his predecessor spent about N7.83 trillion in eight years on fuel subsidy. Reports of the NNPC Limited to the Federal Account Allocation Committee (FAAC) showed subsidy payments of N1.57 trillion in 2021, and N1.27 trillion spent from January to May 2022. From June 2022 to June 2023, when its termination was originally programmed, N3 trillion was budgeted for it.
These expenditures stirred national curiosity; in fact, an open charge of monumental fraud, as the state oil behemoth, the NNPC, and even Buhari, as the substantive minister of Petroleum, could not give the exact quantity of daily fuel consumption. This context is critical. Therefore, the Augean Stables required cleansing. Tinubu then took the bull by the horns without delay. His major challengers in the election – former Vice President Atiku Abubakar and Peter Obi – were equally unequivocal in their subsidy removal advocacy, if elected.
But where Tinubu got it wrong, some would argue, was in his hastiness, without prior consultations with the organised labour and other stakeholders, over how to mitigate its inevitable searing pains. There was no cabinet in place then and for quite some time thereafter. Having put the cart before the horse, a raft of palliatives was hurriedly unfurled, as the Nigeria Labour Congress bristled for a showdown.
The packages include unleashing Compressed Natural Gas buses to help cushion the effects of skyrocketing transport fares. The vehicles are not on Nigerian roads just yet. Then the bait of having the Port Harcourt refinery commence fuel production in December 2023, which did not happen, while a newer date of April 2024 has turned out to be a chicanery too. The general implementation of palliatives to the people unfolded as mired in corruption at the centre, for which a minister has remained suspended from office till date, without any prosecution many months after. State governors were granted loans of N2.5 billion each for delivering palliatives, but they were no less irresponsive in the execution.
Admittedly, fuel subsidy removal as a policy change has halted the haemorrhaging of the treasury, and seen to the doubling of the monthly distributable revenue to the three tiers of government. In June last year, N1.9 trillion was in the coffers, but only N907 billion was shared. The April 2024 figure was N1.2 trillion. For accountability, the NNPC now remits oil revenue to the Central Bank of Nigeria (CBN). Tinubu did well with the Jim Obazee inquest into the apex bank’s operations prior to his assumption of office.
In less than a year, the President has raised economic diplomacy a notch higher, with his peripatetic overtures to foreign investors, which have taken him to France, UAE, India, Saudi Arabia and other nations. He has cut deals in some cases. But it’s not yet Uhuru until these morph into visible and enduring investments. Investors’ confidence is gradually being restored, with the CBN’s settling of foreign airlines and additional debt obligations.
However, Nigeria’s unhinged fiscal crisis is evident in the administration’s rapacious procurement of foreign and domestic loans, the rash of asphyxiating taxations, and the naira’s steady devaluation. The Senate had, in December 2023, approved $7.8 billion and €100 million as part of the 2024 borrowing plan framework. This was followed by a $3.3 billion loan from Afrieximbank, thereafter a first tranche of $2 billion to mitigate the hardship of fuel subsidy and a more recent second tranche of $2.25 billion from the World Bank, coupled with the African Development Bank’s credit of $1 billion to the country. Locally, a N4 trillion credit line has just been secured to fund the 2024 budget deficit.
It is bemusing that these debt cravings misalign with the Minister of Finance, Wale Edun’s expert view in November last year that “Internationally and locally, we are not in a position to rely on borrowing” in funding deficits. Instead, he advocated inward-looking. There are avalanche of leakages to be plugged. Unrecovered oil revenues of over $100 billion (documented stolen crude of $17 billion inclusive), evasion of taxes and levies by VIPs, solid minerals wealth surrendered to rogue miners, unrestrained crude oil theft, revenues the MDAs generate but fail to remit, etc.
Of serious concern is the imprudent use of improved revenues under Tinubu’s government. Its N90 billion 2024 Hajj subsidy, amid an economic headwind, is a sickening misplacement of priority. Christians would expect a balancing act, which will further bleed the treasury. States still owe salaries and pensions. On Tinubu’s watch, the Vice President’s residence cost some N15 billion to build; and the National Assembly splurged N57.6 billion on Sports Utility Vehicles (SUV) for its members. Yet, our universities are grossly underfunded.
The administration is being chafed at, for embarking on a Lagos-Calabar coastal highway construction of 700 kilometres at a tentative cost of N15 trillion, when scores of existing highways remain death traps. The Manufacturers Association of Nigeria (MAN) says 367 companies closed as of December 2023. Out of those still in business, 335 are in distress, while N350 billion worth of goods were not sold.
No economy thrives with an encumbered real sector. Nigeria’s unfriendly Ease of Doing Business has multiple taxations and high energy costs as pivots. Aliko Dangote emphasised it at the recent convention of Africa’s CEOs in Kigali, Rwanda, last week, that out of every N100 he makes in cement manufacturing, taxation takes N54. The CEO of TotalEnergies, Patrick Pouyanne, rubbed it in with his disclosure that his company snubbed Nigeria for Angola, in their $6 billion investment because of its policy flip-flops.
Tinubu has not demonstrated statecraft in allowing workers’ salaries to remain the same, one year after his economic policies unleashed the harshest hardship on Nigerians. Edo and Cross River states have offered N70,000 as against the Federal Government’s N57,000 minimum wage proposal last week. The indexations it might have used for the figure mismatch the headline inflation at 33.69 per cent – the highest in 28 years, and April’s food inflation at 40.53 per cent, as reported by the National Bureau of Statistics (NBS).
The situation is dire for Nigerians, especially for the unemployed, and the over 133 million Nigerians judged in 2022 as being multi-dimensionally poor. A litre of fuel, which sold for N185 a year ago, is currently selling between N750 and N800. Worse is the fact that it is scarce. Mid last year, a 50-kilogramme bag of rice was sold between N42,000 and N50,000. It soared to N90,000 in February, and now it costs N80,000. Besides foodstuffs, the cost of medicines, school fees, and house rents are on the same stratospheric trajectory.
Across a broad spectrum of Nigerians, visceral anger, alongside the din over hunger and suffering, is common. It took the IMF disclosure that subsidies are still being covertly paid on fuel to neuter official denial. This is rank recklessness and duplicity in governance.
Sadly, insecurity has been as eerie as the economy. Banditry and kidnapping are everywhere. The North-West and North-Central remain rivulets of the blood of thousands killed by non-state actors. Farmers, afraid of being killed or kidnapped, can’t farm any more. Tinubu’s recognition of this, perhaps, is the reason for his support of state policing as part of resetting Nigeria’s security Doctrine and Architecture, which he promised.
In a democracy, a president is not above the law. He seems indifferent to this canon with his flagrant violation of Section 14 (3) of the Constitution, which outlaws nepotism and ethnic imbalance in political appointments, in order to promote national unity. His Yoruba ethnic stock is in charge of the Ministry of Finance, Central Bank, Federal Inland Revenue Service, Army, Police, Justice Ministry, Supreme Court, Customs, Immigration, EFCC, Ministry of Power, Office of the Chief of Staff and, Petroleum ministry, which he personally mans. This is certainly not an acceptable way of managing Nigeria’s diversity.
All things considered, the weight of the Constitution that makes the welfare and security of citizens the primary purpose of government, reduces Tinubu’s Renewed Hope mantra to a spectral gambit.
Nigeria’s inability to supply enough crude to Dangote Refinery; oil companies’ resort to the use of badges to ship their crude to export terminals, instead of through oil pipelines as oil theft escalates; the lack of due process in major road contracts; the indulgence of corrupt Customs personnel, while sparing looters of the Humanitarian ministry, are poignant echoes that dim whatever is the glaze of his stewardship so far.
Only a handful of ministers are active. The President needs to review the performance of his team, going forward, and in order to salvage whatever is possible of his dissolving electoral promises to Nigerians.
PT
