With the Nigerian economy on a cliff hanger, many have noted that the task before the in-coming president is enormous, especially with mounting debts and debt service, high inflation and low investments among others; BENJAMIN UMUTEME writes.
That the state of Nigeria’s economy is worrying is no longer news. However, what many Nigerians would be eager to hear is what the incoming President Bola Ahmed Tinubu plans to do to get the economy kicking again.
On March 1, Bola Tinubu, the candidate of the All Progressives Congress (APC), was declared the winner of the Presidential election with a the highest of 8,794,726 votes, followed by Atiku Abubakar of the Peoples Democratic Party (PDP) with a total votes of 6,984,520 votes, while Peter Obi of the Labour Party (LP) scored 6,101,533 votes.
With the initial battle won and lost, the challenge before the former Lagos State governor has been described by many as humongous considering that revenues are dwindling while its obligations continue to go up.
From a skewed power sector, to subsidies payment to huge debt overhang, and low foreign direct investments (FDIs), just to name a few, many have argued that the President needs to begin to put his economic team in place before he is sworn into office on May 29.
Many economists have insisted that for Nigeria to survive economically, we need to remove the petrol subsidy, deregulate the exchange rate, downsize the government’s payroll and widen the tax net. However, the question many more have been asking is whether the incoming President will have the political will to carry out these needed reforms that have the potential to set the country on the path of prosperity.
Work cut out
During campaigns prior to the elections, Tinubu had repeatedly said he had the capacity to perform.
“If it is to rebuild, we are builders; if it is construction, we are constructors. If it is assurance, we give Nigerians the assurance that we definitely make a better country out of it all,” Tinubu said.
The president-elect has over the years canvassed for the revival of the real sector of the economy as they would in turn create jobs and increase government revenues.
“We must revive manufacturing and industrial growth so as to create jobs as well as produce the goods and services that improve the daily lives of the average person. We seek a minimum of 6 percent growth annually through reform of our industrial policy, infrastructural enhancement, power sector innovation, and significant budgetary reform.”
But economic watchers say it is easier said than done. And for financial analyst Gabriel Idakolo, the in-coming president has his work cut out because of the various challenges awaiting the office.
Idakolo, who is the managing director of SD&D Management Limited, told Blueprint Weekend that issues around inflationary trends were yet to subside; just as subsidy removal and myriads of other problems from various sectors of the economy as well.
“The president-elect must immediately assemble technocrats with square pegs in square holes to give both local and foreign investors confidence.
“The key economic issues that the Naira redesign policy has brought need to be addressed and far reaching reforms put in place. In his first 100 days in office, efforts must be made by the new president to stabilise the economy and give assurances to the real sector of impactful change,” he said.
For legal practitioner, Chinua Asuzu, the in-coming president should install a system of financial prudence, and discipline in the management of the nation’s finances.
He said, “Our next president should, immediately after inauguration, begin installing a system of decency, discipline, and modesty in the government. This is not only about fighting corruption, but also about entrenching visible prudence and thrift. The incoming administration should manage and deploy public funds and resources with transparent frugality, and ensure regular audit of all agencies, departments, and ministries.
“The in-coming administration should prioritise infrastructure, especially educational facilities, healthcare facilities, transport (airports, bridges, rails, roads, and waterways), and utilities (electricity, gas, sewerage, and water). The administration should start with rail and roads: building new ones and repairing or maintaining existing ones.
“The in-coming administration should modernise and upgrade Nigeria’s educational institutions, so that they meet the highest international standards. It should also require private institutions to meet these standards.”
While he has been credited with laying the foundation of modern Lagos, Nigerians would like to see the winner of the February polls perform the magic, securing investor confidence and attracting enough foreign direct investments.
Analysts say the situation is not as straightforward as it appears.
Speaking with Blueprint Weekend in Abuja, political economist, Adefolarin Olamilekan, said the situation is very complex as it requires sound and feasible solutions across board.
“More so, the problem with the country’s economy over the years under successive governments at the centre has not been tackled. That is why till date, our economic policy thrust has not yielded the desired result. And regrettably, Nigerians are at the receiving end of bad economic policies and poorly implemented good ones,” he said.
For the development researcher, despite the seemingly huge challenge, there is a lot of hope in the air that the new government would do things differently.
He said: “The expectations of Nigerians are huge, with talks of debts, shortfall in revenue, petrol subsidy removal impact, forex challenges and naira free fall, unemployment, electricity power deficit, dilapidated roads across the country, high cost of doing business and headline inflation, the negative impact of naira redesigned policy, and many others.
“Let’s not forget the pressure and uncertainty around the global economy. Particularly, also is the challenge of international price transmission of goods and services. This is what we witnessed in the importation of luxury items as well as PMS and gas.
“Having said this, for us we hoped the incoming government would prioritise power electricity generation, transmission and distribution? This is the way to bring back localization of industry.”
Aside from all the above, Adefolarin asserted that tackling corruption, especially as it has to do with procurement, will save billions of naira.
“Another, very important aspect is tackling corruption around government procurement and contract, to help save for development purposes.
“We also expect a thorough alternative to cushion the impact of planned removal of petrol subsidies. While our desire for the incoming government is to ensure we refine petroleum product locality with distribution for target domestic consumption as first among equals.
“Similarly, supporting local manufacturers with incentives that are not just loans, but tax credit and removal of multiple tax laws,” he told this reporter.
In a telephone conversation, Friday Efih, an economist, noted that fixing Nigeria’s perennial power problem would go a long way to address issues of unemployment and low manufacturing capacity.
“Personally, I sincerely believe that if the in-coming president and his team can fix the country’s power sector, industries that have gone under due to lack of power will come alive; which means people will be employed and they will pay tax and you know what that means for the country.
“And there is also the vexed subsidy issue. I just hope that Tinubu has the courage to match action with words concerning the removal of the controversial subsidy payment.”