A year of mismatch between performance and reality

On Wednesday, May 29, President Bola Tinubu will complete one year in office. It is a milestone that raises serious reflections, given the electoral promises of each occupant of that position and the country’s existential challenges that must be addressed. A juxtaposition of the two extremes in one year of this administration leaves no one in doubt of a seemingly mortifying chasm.

The administration realized this inconsistency, assessed the public mood and decided to make the anniversary low-key, a revelation made by Information Minister Mohammed Idris. As Tinubu completes a year in office, what can easily and cynically come to the minds of many could be that impromptu and thunderous declaration: “the fuel subsidy has disappeared”, to the applause of the Bretton Woods institutions, the infamous market deities. driven economy. He continued the liberalization of the foreign exchange market. These two policies caused a perfect storm for the economy.

Inflation, its inevitable consequence, has since become a bull in a china shop. Insecurity, imbalance in political appointments, transparency deficits in governance and disdain for the 1999 Constitution have similarly skyrocketed to eclipse Tinubu’s eight-point Renewed Hope Agenda.

President Bola Tinubu [PHOTO: PRESIDENCY]

To be fair, he inherited an economy on the verge of total collapse, which he was desperate to change. For example, his predecessor spent about N7.83 trillion in eight years on fuel subsidies. NNPC Limited reports to the Federal Accounts Allocation Committee (FAAC) showed subsidy payments of N1.57 trillion in 2021 and N1.27 trillion spent from January to May 2022. June 2022 to June 2023, when it was originally scheduled for completion. 3 billion naira was budgeted for this.

These expenses aroused national curiosity; in fact, an open accusation of monumental fraud, as the state oil giant, the NNPC, and even Buhari, as substantive Minister of Petroleum, could not give the exact amount of daily fuel consumption. This context is critical. Therefore, the Augean stables required cleaning. Then Tinubu took the bull by the horns without delay. His main rivals in the election – former Vice President Atiku Abubakar and Peter Obi – were equally unequivocal in their defense of eliminating subsidies, if elected.

But where Tinubu went wrong, some would say, was in his haste, without prior consultation with unions and other stakeholders, on how to mitigate his inevitable searing pains. There was no cabinet then and for quite some time afterwards. Having put the cart before the horse, he hastily deployed a series of palliatives, as the Nigerian Labor Congress fumed over a showdown.

The packages include the use of compressed natural gas buses to help cushion the effects of skyrocketing transportation fares. Vehicles are still not plying on Nigerian roads. Then the bait of the Port Harcourt refinery starting fuel production in December 2023, which did not happen, while a new date of April 2024 also turned out to be a trap. The general application of palliatives to the people developed as mired in corruption at the center, which is why one minister has remained suspended from office to date, without any prosecution many months later. State governors were given loans of N2.5 billion each to implement palliatives, but they were no less irresponsible in execution.

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It is true that the elimination of fuel subsidies as a policy change has stopped the hemorrhaging of the treasury and has made it possible to double the monthly income distributable to the three levels of government. In June last year, there was N1.9 trillion in the coffers but only N907 billion was distributed. The April 2024 figure was N1.2 trillion. To be accountable, the NNPC now remits oil revenues to the Central Bank of Nigeria (CBN). Tinubu did well under Jim Obazee’s investigation into the operations of the apex bank before taking office.

CBN headquarters in Abuja

In less than a year, the president has taken economic diplomacy to a higher level, with his roadshow pitches to foreign investors taking him to France, the United Arab Emirates, India, Saudi Arabia and other nations. In some cases he has reached agreements. But it is not yet Uhuru until these are transformed into visible and lasting investments. Investor confidence is gradually being restored, with the CBN liquidating foreign airlines and additional debt obligations.

However, Nigeria’s unhinged fiscal crisis is evident in the administration’s rapacious domestic and foreign borrowing, the barrage of suffocating taxes and the constant devaluation of the naira. In December 2023, the Senate had approved 7.8 billion dollars and 100 million euros as part of the framework of the debt plan for 2024. This was followed by a loan of 3.3 billion dollars from Afrieximbank, later a first tranche of 2 billion of dollars to mitigate fuel subsidy difficulties and a second, more recent tranche of $2.25 billion from the World Bank, along with the African Development Bank’s credit of $1 billion for the country. Locally, a N4 trillion line of credit has just been secured to fund the 2024 budget deficit.

It is disconcerting that these borrowing cravings do not coincide with Finance Minister Wale Edun’s expert opinion in November last year that “internationally and locally, we are not in a position to rely on borrowing” to finance deficits. Instead, he advocated looking inward. There is an avalanche of leaks to plug. Unrecovered oil revenues of over $100 billion (documented stolen crude oil worth $17 billion inclusive), evasion of taxes and levies by VIPs, solid mineral wealth given to dishonest miners, rampant theft of crude oil, income that MDAs generate but do not remit, etc.

The reckless use of enhanced revenue during the Tinubu administration is a matter of serious concern. His N90 billion subsidy for Hajj in 2024, amid an economic headwind, is a disgusting loss of priority. Christians would expect a balancing act that would further drain the treasury. States still owe salaries and pensions. Under Tinubu’s direction, the construction of the vice president’s residence cost about N15 billion; and the National Assembly splurged N57.6 billion on sports utility vehicles (SUVs) for its members. However, our universities are underfunded.

The administration is being irritated for embarking on the construction of a 700 kilometer Lagos-Calabar coastal road at a tentative cost of N15 trillion, when scores of existing roads remain death traps. The Manufacturers Association of Nigeria (MAN) says 367 companies closed as of December 2023. Of those still in business, 335 are in distress, while goods worth N350 billion were not sold.

No economy thrives with an overstretched real sector. Nigeria’s hostile ease of doing business is pivoted by multiple taxes and high energy costs. Aliko Dangote emphasized at the recent African CEOs convention in Kigali, Rwanda last week that out of every N100 he earns in cement manufacturing, taxes take up N54. TotalEnergies CEO Patrick Pouyanne rubbed it in by revealing that his company snubbed Nigeria over Angola in its $6 billion investment because of its policy changes.

Tinubu has shown no ability to govern by allowing workers’ salaries to remain the same, a year after his economic policies unleashed the harshest hardships for Nigerians. Edo and Cross River states have offered N70,000 against the Federal Government’s N57,000 minimum wage proposal last week. The indexations that could have been used for the figure do not coincide with the general inflation of 33.69 percent, the highest in 28 years, and the April food inflation of 40.53 percent, as reported by the National Statistics Office (BNE).

The situation is dire for Nigerians, especially the unemployed, and for the more than 133 million Nigerians considered multidimensionally poor in 2022. A liter of fuel, which a year ago was sold at 185 naira, is currently sold between 750 and 800 naira. Worse is the fact that it is scarce. In the middle of last year, a 50-kilogram bag of rice sold for between N42,000 and N50,000. It shot up to N90,000 in February and now costs N80,000. In addition to food, the cost of medicine, school fees and house rents are following the same stratospheric trajectory.

Price at the fuel pump and fuel subsidy

Across a wide spectrum of Nigerians, visceral anger, coupled with noise about hunger and suffering, is common. It took the IMF’s revelation that covert fuel subsidies were still being paid to neutralize the official denial. This is pure recklessness and duplicity in governance.

Unfortunately, insecurity has been as disturbing as the economy. Banditry and kidnappings are everywhere. The northwest and north-central areas remain streams of blood from thousands of people murdered by non-state actors. Farmers, for fear of being killed or kidnapped, can no longer farm. Tinubu’s recognition of this, perhaps, is the reason for his support of the state police as part of the restoration of the Nigerian Security Doctrine and Architecture, which he promised.

In a democracy, a president is not above the law. He seems indifferent to this canon with his flagrant violation of Section 14(3) of the Constitution, which prohibits nepotism and ethnic imbalance in political appointments, in order to promote national unity. Its Yoruba ethnic lineage is in charge of the Ministry of Finance, Central Bank, Federal Inland Revenue Service, Army, Police, Ministry of Justice, Supreme Court, Customs, Immigration, EFCC, Ministry of Energy, Office of the Chief of Staff and Petroleum. ministry, which he personally directs. This is certainly not an acceptable way to manage Nigeria’s diversity.

Considering all this, the weight of the Constitution that makes the welfare and security of citizens the primary objective of government, reduces Tinubu’s Renewed Hope mantra to a spectral tactic.

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Nigeria’s inability to supply sufficient crude oil to the Dangote refinery; oil companies’ resort to using badges to ship their crude to export terminals, rather than through pipelines, as oil theft increases; the lack of due process in major highway contracts; the indulgence of corrupt Customs staff, while avoiding looters from the Humanitarian Ministry, are poignant echoes that obscure whatever brilliance of his administration so far.

Only a handful of ministers are active. The president needs to review the performance of his team, going forward, to salvage what is possible of his electoral promises to Nigerians, which are dissolving.