Did President Bola Tinubu hit the ground running? He removed fuel subsidy, and ended the obnoxiously managed forex allocation. The former forex regime held back the whole economy just to enrich a few. Next was the suspended Governor of the Central Bank of Nigeria, Godwin Emefiele, with no one shedding tears for him as he is the fall guy for the morass of the last administration. The two policy pronouncements point to a Chief Executive Officer on a rescue mission to fix a run-down enterprise and the new CEO appears to be armed with knowledge of issues running the company aground.
Pseudo-socialists love the hoi polloi, unlike the liberals who exploit the masses. Many have asked Tinubu, why so fast. Slow down; better to introduce Band-Aid for the people than inflict pain that comes with the needed but painful therapy. The same people who applauded former President Muhammadu Buhari’s unorthodoxy and his supposedly people-oriented palliatives and policies that eventually minted more poverty are vilifying Tinubu for moving too fast.
Tinubu’s policy pronouncements are in stark opposition to the inactions of Baba go slow of eight years ago. On assumption of office, former President Muhammadu Buhari had the political capital and supposed integrity to let go of subsidy; a good fortune President Goodluck Jonathan did not have by 2012. Rather, Buhari entrenched petrol subsidy. Furthermore, he reintroduced fiat that fixed the value of naira which had been abandoned after the last military regimes of the late Generals Sani Abacha and Abdulsalami Abubakar. Unfortunately, it was the fixing of the Naira at 197 to the dollar that led to the 2016/2017 recession as investors vacated the country, foreign direct investment froze and remittances dropped. The decline in economic growth that began in 2014 was not stemmed by the Buhari administration in 2015. It was hastened and we landed in recession in 2016. These two policies of Buhari, despite depressing the economy, were well received and applauded by today’s naysayers.
Intellectuals for the Buhari administration led by former finance minister Kemi Adeosun totally misdiagnosed what brought on the collapse of growth in the economy. And when you misdiagnose, maladministration sets in. They applied Keynesian reflation to what was a balance of trade problem. Today’s penchant for borrowing and turning on the money printing press is the aftermath of that wrong prescription. The naysayers would want us to believe it’s Tinubu’s reversal of policy to the pre-Buhari years that is bringing on the current hardship.
They loved Buharinomics because they perceived it as being anti-capitalist and pro-people that emulated the policies of the late Chavez of Venezuela. Buhari’s unorthodoxy, alms-awarding social intervention schemes seemed right to them. Yet the economy remained depressed and hardship in the land became more intense. Not till they witnessed the increasing poverty in the land did they distance themselves from Buhari.
Asiwaju Bola Tinubu should expect the same treatment former military President, General Ibrahim Babangida, received and I believe it has begun. However he should not relent, in fact he should dig in and go deeper than the IBB or former President Olusegun Obasanjo reforms that delivered to Nigeria the country’s fastest growth for 14 years. It is the absence of this growth profile that led to Nigeria becoming the poverty capital of the world and it is a return to this growth, especially to a double-digit growth profile, that will bail out the poor. A double-digit growth rate means the poor will receive better wages as they participate in baking the national cake. You have begun with the right body language, time to concentrate on the real grunt work and please, enough of your travelling.
To achieve a DDG rate and translate Nigeria into a trillion-dollar economy and double the national cake within seven years, you have to concentrate and improve on things not done by the previous administrations. There is a total failure of non-oil exports and this has led to impoverishing our people because the monetary authorities have lost control over the value of the naira as they depended only on oil receipts which have become inadequate. An increase in non-oil exports is one of the ways to improve the economy, but the Nigerian business elite did not buy in and to date, only the Dangote Group factors exports in its investments.
While manufacturing accounts for 50 per cent of imports into Nigeria, it accounts for a meagre three per cent of Nigeria’s exports. This disconnect cannot be allowed to continue. Nigeria should have industrialised through high-value addition to its primary commodities before exporting but we industrialised through import substitution policy. It is through our failure here that the monetary authorities have lost control of the naira and with this loss; it has impoverished every Nigerian except those in Diaspora who earn in dollars. If we want the poor to breathe, engaging in the export of manufactured products to firm up the Naira is the way to go.