Charting a Path for President Bola Ahmed Tinubu Amidst High Expectations

Charting a Path for President Bola Ahmed Tinubu Amidst High Expectations

By Zachariah Adigizi Hyellamada

Tinubu steps into a nation weighed down by simultaneous challenges in security and economy. The Nigerian populace anticipates his adeptness in harmonizing the nation and countering economic strains, partly stemming from the withdrawal of unsustainable subsidy systems that have previously shackled the government’s financial capabilities. Tinubu has already embarked on initial steps, such as the eradication of the petroleum subsidy, an action expected to save Nigeria a substantial $5.10 billion in the latter half of 2023. This fund injection could potentially foster growth and be allocated to developmental initiatives.

Furthermore, Tinubu’s ascendancy to the role of chairman for the Economic Community of West African States (ECOWAS) arrives at a pivotal moment for African leadership on the global stage. A noticeable need for strong leadership and improved coordination between African nations has surfaced, particularly evident in the discord among African countries concerning the future global financial architecture. Tinubu’s leadership acumen could be a catalyst for unification, compelling African nations to present a consolidated front that is not swayed by superficial agreements. This united front could advocate for more substantial measures, aligning with the strategic recommendations from the Africa High-Level Working Group on the Global Financial Architecture. The objective: pushing affluent nations to champion African debt relief and channel fresh financing towards climate action.

Navigating Complex Domestic Terrain
Tinubu’s administration is confronted with the arduous task of addressing a fractured social contract between the government and its citizens, exacerbated by economic inequalities that frequently manifest as instability and criminal activities.

Although these conditions were not forged by Tinubu’s administration, it is entrusted with the responsibility of remedying them through prudent economic and security strategies. The administration’s response has been characterized by resolute security measures and bold economic policies, which include the termination of fuel subsidies. A significant stride has been the enactment of the Student Loan Act, a pivotal mechanism to enhance higher education accessibility. Additionally, the suspension of the Central Bank of Nigeria’s (CBN) governor was enacted to depoliticize the position. Notably, the newly appointed Acting Governor of the CBN, Folashodun Shonubi, terminated the utilization of multiple exchange rates, introducing a more open exchange rate system. This change curbs the arbitrage between the black-market and official foreign-exchange rates that previously enabled rent-seeking practices.
Yet, the journey ahead for Tinubu is substantial. To maintain public confidence, the administration should effectively communicate that addressing Nigeria’s two primary economic challenges – high inflation and unemployment – necessitates striking a balance. Efforts to tackle one issue may temporarily exacerbate the other. However, the administration should strategically prioritize economic expansion and job creation. This emphasis is particularly crucial due to the concurrent pressures of endogenous and exogenous inflation. The removal of the petrol subsidy and the liberalization of the foreign exchange market have compounded these inflationary pressures.

Read Also: THE NIGERIAN ECONOMY: WHERE ARE WE NOW?

While external inflationary influences are fueled by global events such as rising food prices and currency fluctuations, domestic factors, including the removal of subsidies and currency devaluation, have accentuated Nigeria’s economic challenges. Tinubu’s economic reforms are pivotal in alleviating these concerns, particularly the urgent need to diminish Nigeria’s estimated debt service-to-revenue ratio of 73.5% in 2023, and its debt-to-GDP ratio projected to reach 37.1% this year.

The Tinubu administration’s approach strikes a balance between economic reforms and amplified social programs. The Nigerian Senate’s approval of an $800 million World Bank loan to counteract inflationary pressures post-subsidy removal exemplifies a comprehensive approach. The administration’s prioritization of affordable food and clean water as national-security imperatives underscores its commitment to citizens’ welfare. However, it is imperative to note that debt-financed strategies are short-term solutions. The administration’s focus must pivot towards augmenting internally generated revenue, refining infrastructure, and fostering a conducive environment for economic growth and job creation. Enhancing tax payment processes and harmonizing tax laws are critical steps in this direction, as they will augment the ease of doing business and subsequently expand the tax base, fostering economic growth and discouraging the exodus of talented young Nigerians.

The administration should also channel investments into infrastructure development, with a focus on implementing the 2023 Electricity Act. This act empowers states, corporations, and individuals to engage in electricity generation, transmission, and distribution, bolstering private-sector investments. Presently, Nigeria’s electricity generation of four thousand megawatts falls drastically short of the required 30,000 megawatts for its population of over 210 million. Stable electricity provision is pivotal for industrialization, productivity enhancement, and the overall improvement of living standards. By adopting a grassroots-driven regional industrialization framework, the administration can transition the 80% of workers employed in low-productivity sectors into the formal economy, thereby elevating economic prospects.

Broader Economic Integration and Reimagination of Federal Character

The administration’s agenda must extend towards fostering robust economic integration across Nigeria’s six geopolitical zones. The Nigerian National Economic Council (NEC), comprising vice presidents and state governors, is strategically poised to facilitate this integration. Nigeria’s constitution stipulates that principal political officeholders reflect the “federal character” – representing diverse tribal, religious, and regional backgrounds. However, this concept has, over time, morphed into a mechanism for resource distribution and patronage. Tinubu’s administration should redefine these six geopolitical zones as catalysts for regional economic development. By leveraging inherent comparative advantages, these zones can drive productive economic activities, diminishing the current focus on mere resource allocation.

Furthermore, the Tinubu administration should embark on revitalizing Nigeria’s chronically underfunded tertiary education system. The creation of centers for entrepreneurship and green-technology innovation, uniting universities and polytechnic colleges, could serve as engines for developing solutions to the nation’s pressing challenges. A prime example is Nigeria’s annual expenditure of $22 billion on private electricity generators, despite a mere 2% adoption of solar power. The recently introduced $550-million off-grid solar electrification program, coupled with collaborations with polytechnics, holds the potential to offer domestic energy solutions for homes and small businesses.

Global Frontiers and Shaping Nigeria’s Leadership

The Tinubu administration finds itself at the crossroads of shaping Nigeria’s global leadership narrative. This journey begins with a purposeful engagement with Nigeria’s highly educated diaspora. Many of these individuals hold positions or lead organizations that can serve as conduits for international markets, capital inflow, and foreign direct investment.
Nigeria, as one of Africa’s leading economies, stands poised to wield its substantial influence. With Tinubu’s chairmanship of ECOWAS, Nigeria is endowed with an opportunity to forge a unified African stance on diverse issues. Central among these is the defense of a rules-based international order that resonates with African equity and strategic interests. This collective voice is indispensable for effectively championing African interests within the G20, including the potential for African Union membership in the forum, as well as other international platforms like the International Monetary Fund, World Bank, and United Nations. Tinubu’s leadership will be instrumental in navigating regional challenges, including the recent coup in Niger, while responding judiciously as ECOWAS’ helmsman.

In the realm of international engagement, Tinubu’s administration needs to substantiate Nigeria’s capability to assume a leadership role. This endeavor starts with intentional engagement with the highly skilled Nigerian diaspora, who hold the potential to become bridges to international markets, financial resources, and foreign direct investment.
With Africa’s largest economy and population, coupled with Tinubu’s influential position, there is a surge in expectations for Nigeria to forge a consensus across various matters. This includes safeguarding a rules-based global order that accommodates African perspectives and strategic interests. Such strides are imperative for Nigeria to steer the advancement of African priorities within international platforms like the G20 and other pivotal forums. Amid regional challenges and critical developments such as the Niger coup, Tinubu’s leadership is undeniably at a crossroads. The world watches closely as he confronts these multifaceted challenges and endeavors to address them on the global stage.

In this intricate tapestry of challenges and opportunities, Tinubu’s administration must craft an inclusive domestic economic policy and a robust foreign policy agenda to enable Nigeria’s impactful international engagement. The global landscape teems with opportunities for the Nigerian government to deliver tangible outcomes for its citizens and the broader African continent. This moment calls for visionary leadership, and it’s up to Tinubu to seize this extraordinary opportunity.

Charting a Path for President Bola Ahmed Tinubu Amidst High Expectations