LATEST OPINION: Now that Mr President is back

President Bola Ahmed Tinubu, who departed Nigeria on Wednesday, October 2, for a working vacation, returned on Saturday, October 19, 2024.

Special Adviser to the President on Information and Strategy, Bayo Onanuga, said that the vacation was also intended to serve as a retreat for Mr. President to reflect on his administration’s economic reforms. The economic policies adopted by this administration, which have caused considerable hardship for Nigerians, have been widely criticized, with some calling for the reversal of certain policies. Now that Mr. President is back, what’s next?

Well, President Bola Ahmed Tinubu and the Federal Executive Council have changed the federal ministry structure. The Ministry of Niger Delta and the Ministry of Sports have been dissolved. Among other changes the FEC also approved the merger of the Ministry of Tourism with the Ministry of Culture and Creative Economy. Now that the reshuffle has been done, it is expected it aligns with the President’s broader strategy to enhance governance. However, to achieve the desired results, it is imperative that issues like workload, funding, bureaucracy, and communication of deliverables, as well as other factors beyond the ministers’ control are properly addressed.

While Mr. President is not expected to reintroduce the fuel subsidy, it is imperative that he directs an investigation into the pricing of PMS (premium motor spirit) to ensure Nigerians are not being exploited. The price of PMS has been on a constant rise in recent weeks. Beyond attributing it to the price of crude oil in the international market, Nigerians need to understand how the price of PMS is derived. It is important to note that various petroleum products, not just PMS, are derived from crude oil during the refining process through fractional distillation. This should be taken into consideration during price determination.

The value of the Naira has been unstable for some time, dropping below N1,700 to a dollar at one point. Ordinarily, with the rise in the price of crude oil, which is Nigeria’s major source of forex, one would expect a more stable Naira, but that is not the case. Nigeria’s oil production dropped in the month of September 2024. While this may be one of the factors that contributed to the decline in the value of the Naira, the government should identify and address all the causative factors.

Quite worrisome is Nigeria’s headline inflation rate, which, on a year-on-year basis, rose to 32.7% in September after two months of consecutive decline. Some contributing factors include the rise in transportation costs due to the increased price of PMS, the depreciating Naira, and the floods that ravaged farmlands. The government should look beyond merely increasing the Monetary Policy Rate to curb inflation and should among other things, consider the advice of the World Bank to lift import restrictions on food and fertilizer, especially as food is the major driver of Nigeria’s inflation.

While we welcome Mr. President back to the country from his working vacation, it is important to note that Nigerians expect him to address the rising price of PMS, the instability of the Naira, the increase in headline inflation, and possibly carry out the much-anticipated cabinet reshuffle.

CBN Governor Olayemi Cardoso(middle) with a delegation from the World Bank Group led by Mr. Indermit Gill, Chief Economist and Senior Vice President for Development Economics(3rd left). The team also included Ndiame Diop – WB Country Director for Nigeria at the 30th Nigerian Economic Summit in Abuja

The current economic policies of this government have received much criticism due to the resulting hardship. However, to the dismay of many Nigerians, at the 30th Nigerian Economic Summit (#NES30) in Abuja on Monday, October 14, 2024, the Vice-President of the World Bank, Mr. Indermit Gill, said that Nigeria’s current reforms must be sustained for the next 10-15 years to transform its economy and become an engine of growth in sub-Saharan Africa. Let’s keep our fingers crossed for Mr. President’s next move.

By Kenechukwu Aguolu FAC,PMP,FCIA