Jay Boss
For many Nigerians, the past year has brought increased hardship as President Bola Ahmed Tinubu’s eight-point agenda has failed to address rising inflation, unemployment, and a declining GDP.
Despite Tinubu’s promises, outlined in his eight-point agenda, the country continues to struggle with high unemployment, inflation, and negative economic indicators. His notable statement on May 29 about the removal of fuel subsidies set the stage for the implementation of this policy, leading to an immediate increase in fuel prices from N260 to over N500 per litre.
According to the National Bureau of Statistics (NBS), the average fuel price soared to N702 per litre in April 2024, up from N254.06 in April 2023. FMDQ data indicates that the removal of the fuel subsidy and the harmonization of the foreign exchange market drove the Naira to 1339.33 per dollar.
These policies have exacerbated headline and food inflation, reaching record highs of 33.69% and 40.53%, respectively, in April 2024. Rising energy costs have compounded economic difficulties for both Nigerians and manufacturers.
On April 3, the Nigerian Electricity Regulatory Commission announced a 240% increase in electricity tariffs for customers with at least 20 hours of power supply. Although the tariff was slightly reduced, Nigerians continue to struggle with the high cost of goods and services.
In its April 2024 Food Price Watch, the NBS reported that the prices of staple foods such as rice, beans, garri, yam, and tomatoes increased by over 130%, further eroding purchasing power. Inflation has rendered smaller currency denominations nearly worthless, with items like sweets now costing ‘two pieces for N50’.
CBN Monetary Interventions
Since Olayemi Cardoso became the governor of the Central Bank of Nigeria (CBN), interest rates have been raised three times, reaching 26.25% in May, up from 18.75% in September last year. Despite these measures, inflation remains untamed, climbing from 22.41% in May 2023 to 33.69% in May 2024.
Cardoso has pledged to combat inflation, but rising food prices and heightened insecurity across various regions have exacerbated the situation. In August, Finance Minister Wale Edun presented Tinubu’s eight-point agenda, focusing on food security, poverty eradication, economic growth, job creation, access to capital, inclusivity, security, fair business practices, rule of law, and anti-corruption.
However, one year later, inflation, unemployment, and underemployment remain high. According to the NBS, unemployment and underemployment stood at 5% and 12.3%, respectively, in Q3 2023. Tinubu’s New Year message emphasized the need for resilience despite the tough economic climate, but the economic challenges persist.
CBN Multiple Interventions
The CBN’s numerous policy interventions have had limited impact. Despite efforts to clear a $7 billion forex backlog, inflation continues to rise, reaching 33.69% in April. The Naira’s value fluctuated, moving from the best-performing currency to the worst within a few weeks in April.
Power Sector Challenges
Despite the Ministry of Power’s claim that electricity generation increased to 5,000 megawatts in Q1 2024, power generation remains insufficient for Nigeria’s population of 200 million. The recent hike in electricity tariffs has added to the country’s infrastructural deficits and financial challenges.
Oil and Gas Sector
The Petroleum Industry Act was expected to boost the oil and gas sector, but oil theft in the Niger Delta continues to affect revenue. The Nigerian Upstream Petroleum Regulatory Commission reported a slight increase in crude oil production to 1.28 million barrels per day in April 2024. Despite attracting $16 billion in investment commitments, tangible results have yet to materialize.
Agriculture and Transportation
Food prices and transportation costs have continued to rise, contrary to the government’s goals of ensuring food security. The NBS reported that food inflation rose to 40.53% in April 2024. Although the government claims that agricultural policies have created nearly 60,000 jobs, unemployment and food inflation remain high.
Experts’ Reactions and Way Forward
Experts, such as Idakolo Gbolade and Muda Yusuf, criticize the government’s monetary and fiscal policies as reactionary and ineffective. Gbolade rates Tinubu’s economic management as below average and calls for more systematic and people-oriented policies. Yusuf emphasizes the need for structural reforms to stabilize the economy.
Prof. Segun Ajibola acknowledges the necessity of subsidy removals and market harmonization but stresses the importance of managing the resulting economic pain. He suggests focusing on local production, tackling oil theft, and improving power infrastructure to enhance economic welfare.
Overall, experts believe that while the first year of Tinubu’s administration has been challenging, there is potential for improvement if the government implements effective policies and addresses critical issues.
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