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Nigeria to NYT: Tinubu focused on resolving current economic crisis as US, Europe confront theirs 

President Bola Ahmed Tinubu, GCFR

*The Federal Government asserts the United States, Europe, and other economies worldwide are equally in the throes of a cost of living (COL) crisis, and as those countries are trying to confront the problem, President Bola Ahmed Tinubu’s administration is also working hard to overturn the economic problem in Nigeria

Gbenga Kayode | ConsumerConnect

The Federal Government of Nigeria has replied to Ruth Maclean and Ismail Auwal’s recent feature story titled: “Nigeria Confronts Its Worst Economic Crisis in a Generation”, published in the US-based The New York Times (NYT) of June 11, 2024.

The government said the report reflected the typical jaundiced, predetermined, reductionist, derogatory, and denigrating way foreign media establishments have reported African countries for several decades.

In an explanatory response to the feature in the NYT, Mr. Bayo Onanuga, Special Adviser to the President on Information and Strategy, Sunday, June 16, stated because of the misleading slant of the report in the foreign news publication, the Presidency needed to clarify some misconceptions conveyed by the reporters as regards the economic policies of the Bola Ahmed Tinubu administration that came into power at the end of May 2023.

The government also noted most significant about the report was that it painted the dire experiences of some Nigerian consumers amid the inflationary spiral of 2023, and blamed them all on the policies of the new administration led by President Tinubu.

Onanuga stated: “The report, based on several interviews, is at best jaundiced, all gloom and doom, as it never mentioned the positive aspects in the same economy as well as the ameliorative policies being implemented by the central and state governments.

To be sure, President Tinubu did not create the economic problems Nigeria faces today. He inherited them. As a respected economist in our country once put it, Tinubu inherited a dead economy.”

On current administration’s efforts at resetting Nigerian economy

Onanuga also said on Tinubu’s assumption on office as the President, the Nigerian economy was bleeding, and needed quick surgery to avoid being plunged into the abyss, as happened in Zimbabwe and Venezuela.

He noted: “This was the background to the policy direction taken by the government in May/June 2023: the abrogation of the fuel subsidy regime and the unification of the multiple exchange rates.

“For decades, Nigeria had maintained a fuel subsidy regime that gulped $84.39 billion between 2005 and 2022 from the public treasury in a country with huge infrastructural deficits and in high need of better social services for its citizens.

“The state oil firm, NNPC (Nigerian National Petroleum Company) Limited, the sole importer, had amassed trillions of Naira in debts for absorbing the unsustainable subsidy payments in its books.”

As regards the rationale for discontinuation of the controversial petrol subsidy regime from May 2023, the rejoinder explained by the time President Tinubu took over the leadership of the country, there was no provision made for fuel subsidy payments in the national budget beyond June 2023.

“The budget itself had a striking feature: it planned to spend 97 percent of revenue servicing debt, with little left for recurrent or capital expenditure. The previous government had resorted to massive borrowing to cover such costs.

“Like oil, the exchange rate was also being subsidised by the government, with an estimated $1.5 billion spent monthly by the CBN to ‘defend’ the currency against the unquenchable demand for the Dollar by the country’s import-dependent economy,” said the Presidential aide.

According to the government, by keeping the rate low, arbitrage grew as a gulf existed between the official rate and the rate being used by over 5,000 BDCs (Bureaus De Change) that were previously licensed by the Central Bank of Nigeria.

Onanuga revealed that the West African country, at the time, was failing to fulfil its remittance obligations to airlines and other foreign businesses, such that FDIs (Foreign Direct Investments) and investment in the oil sector dried up, and notably Emirates Airlines cut off the Nigerian route.

He, however, affirmed that President Tinubu had to deal with the cancer of public finance on the first day by rolling back the subsidy regime and the generosity that spread to neighbouring countries. Then, his administration floated the Naira.

“After some months of the storm, with the Naira sliding as low as N1,900 to the US Dollar, some stability is being restored, though there remain some challenges.

“The exchange rate is now below N1,500 to the Dollar, and there are prospects that the Naira could regain its muscle and appreciate to between N1,000 and N1,200 before the end of the year.”

Some gains of ongoing reforms, by Onanuga

The Special Adviser to the President on Information and Strategy disclosed the economy recorded a trade surplus of N6.52 trillion in Q1 2024, as against a deficit of N1.4 trillion in Q4 of 2023.

Onanuga stated: “Portfolio investors have streamed in as long-term investors. When Diageo wanted to sell its stake in Guinness Nigeria Plc, it had the Singaporean conglomerate, Tolaram, ready for the uptake.

“With the World Bank extending a $2.25 billion loan and other loans by the AfDB and Afreximbank coming in, Nigeria has become bankable again. This is all because the reforms being implemented have restored some confidence.

“The inflationary rate is slowing down, as shown in the figures released by the National Bureau of Statistics for April.”

The government, nonetheless, noted that food inflation remains the biggest challenge, and the current administration is “working very hard to rein it in with increased agricultural production.”

Contributions of MDAs, state governments to address food inflation

Onanuga further disclosed that “the Tinubu administration and the 36 states are working assiduously to produce food in abundance to reduce the cost.”

He noted that some state governments, such as Lagos and Akwa Ibom, have set up retail shops to sell raw food items to residents at lower prices than the market prices.

“The Tinubu government, in November last year, in consonance with its food emergency declaration, invested heavily in dry-season farming, giving farmers incentives to produce wheat, maize and rice.

“The CBN has donated N100 billion worth of fertilizer to farmers, and numerous incentives are being implemented.

“In the western part of Nigeria, the six governors have announced plans to invest massively in agriculture,” he said in the rejoinder.

Onanuga, therefore, declared with all the plans being executed, inflation, especially food inflation, would soon be tamed.

US, Europe, others also battling cost of living crisis, says Presidency

The Presidential aide equally stated that Nigeria is not the only country in the world facing a rising cost of living (COL) crisis.

The government averred: “The USA, too, is contending with a similar crisis, with families finding it hard to make ends meet. US Treasury Secretary Janet Yellen raised this concern recently.

“Europe is similarly in the throes of a cost of living crisis. As those countries are trying to confront the problem, the Tinubu administration is also working hard to overturn the economic problems in Nigeria.”

Onanuga added: “Our country (Nigeria) faced economic difficulties in the past, an experience that has been captured in folk songs. Just like we overcame then, we shall overcome our present difficulties very soon.”

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