MAY 29 INAUGURATION: TINUBU WILL INHERIT INSECURITY, A SUBSIDY CRISIS, ECONOMIC INSECURITY, AND OTHER ISSUES
The future administration would be inheriting a lot of difficulties that eluded answers under President Muhammadu Buhari's tenure.
Nigeria has been beset with loads of economic issues ranging from high rates of loans, inflation, unemployment, poverty, among others.
A report by the United Nations, UN, had suggested that Nigeria's economy under Buhari is worse than 10 years before.
The UN, in its 2023 Global Economic Situation and Prospects report published on its website, claimed high inflation and power supply concerns are affecting growth in Nigeria.
In its flagship study titled 'Global Economic Outlook,' the UN said: "The pandemic has reversed at least a decade of gains in per capita income in some countries- in almost a third of the region's economies, including Angola, Nigeria, and South Africa, per capita incomes are forecast to be lower in 2022 than a decade ago."
MON DIARIES lists several economic challenges Tinubu's administration may face upon taking office again.
The Monetary Policy
Before to the 2023 presidential election, the Central Bank of Nigeria, CBN, had announced the redesign of various denominations of the naira. The apex bank revised the N200, N500, and N1000 notes, a circumstance that brought about so much misery in Nigeria.
The strategy nearly ground Nigeria's economy to a halt since citizens found it impossible to obtain their money, making transactions difficult.
Throughout his campaign, Tinubu accused individuals in power of utilizing the naira devaluation and fuel scarcity to sabotage his presidential ambition. Despite the release of cash, the policy's impact remains in the country. It remains to be seen how the next Tinubu administration will handle the situation.
Loans
Despite Nigeria's debt profile currently standing at 44.25 trillion, the Federal Government last week revealed that it has acquired a $800 million loan from the World Bank to be used as palliatives for post-fuel subsidy elimination in June 2023.
Aside from the World Bank loan, the Debt Management Office reported as at March 31, 2020, the Overall Borrowing by Nigeria from China was $3.121 billion, this sum represents 3.94% of Nigeria's Total Public Debt of USD79.303 billion as at March 31, 2020. Similarly, in terms of external sources of funds, loans from China represented for 11.28% of the External Deht Stock of USD27.67 billion at the same data
The worrisome expanding loan facility, which is almost becoming unserviceable, is one key concern that would stare the next government in the face.
Insecurity
One of the tough issues Tinubu will face upon resumption of government is that of insecurity across the country. Although Boko Haram and bandits are ravaging the Northern section of the country, unknown gunmen are wreaking havoc in the Southeast. The operations of these gunmen have widely harmed Nigeria's economy under Buhari, ergo Tinubu's administration would have a lot to do.
The multinational consulting firm, in a newly released report tagged 'KPMG Global Economy Outlook report, H1 2023,' said unemployment will continue to be a challenge due to the slower-than-required economic growth and the inability of the economy to absorb the 4-5 million new entrants into the Nigerian job market every year.
"Unemployment is expected to continue to be a major challenge in 2023 due to the limited investment by the private sector, low industrialization and slower than required economic growth and consequently the inability of the economy to absorb the 4-5 million new entrants into the Nigerian job market every year.
"Although the National Bureau of Statistics recorded an increase in the national unemployment rate from 23.1per cent in 2018 to 33.3per cent in 2020. We estimate that this rate has increased to 37.7per cent in 2022 and will rise further to 40.6 per cent in 2023," it said.
Unemployment
KPMG has indicated that the Nigerian unemployment rate had climbed to 37.7per cent in 2022 and will further rise to 40.6per cent, due to the ongoing flood of job seekers into the job market.
Inflation rate
Prior to 2015, Nigeria's inflation rate maintained at a single digit- even as observers opined at the time that it was high. According to official figures, the nation's inflation rate ranged from 7.7 percent, which was the lowest, to 8.5 percent, which was the highest.
When Buhari took office, the inflation rate averaged 9%. Since then, the country's inflation rate has skyrocketed. Figures issued by the National Bureau of Statistics, NBS, had showed that under Buhari, Nigeria's inflation rate touched a 16-year high amid a rise in prices and inadequate buying power, a condition Tinubu would tackle upon assumption of office.
Subsidy For Gasoline
Plans for the withdrawal of Nigeria's petrol subsidy have been finalized just a few months before Buhari's term ends.
Zainab Ahmed, Minister of Finance, Budget, and National Planning, has hinted that the subsidy might be removed before May 29.
Over the last five years, Nigeria has spent nearly N3.27 trillion on petrol subsidies, amounting to an average of N272 billion every month.
Eze Onyekpere, the Lead Director of the Centre for Social Justice and a Financial expert, commented on the issues, saying Tinubu and his men would determine if Nigeria's economy would grow in the next four years.
According to Onyekpere, the economy could develop under Tinubu's administration provided all essential parties work together.
Onyekpere said: "The economic issues bedevilling the nation, have they changed? They are still there. We have low revenue, unemployment, inflation rate is hitting the rooftop, it's actually all the things we have been discussing in the past seven years, and they would need his attention.
"At least, we must have the revenue to run the government by paying salaries, building infrastructure, maintaining law and order, and servicing security.
""We also have the fuel subsidy crisis, but how do you remove it without cushioning the effect on the economy? So, we have to talk to the organised labour and other stakeholders to determine the roadmap and what he needs to do.
"The issue of whether the economy will improve or deteriorate is based on Tinubu and his party men. First, Nigeria is more divided today than before the election; even though he has been declared the winner, his team members are still in the fighting mood.
"If they understand that they are going to form a government and need to carry everybody along, and they do so by dousing the tension, then there would be a chance of progress.
"So, the first thing for economic improvement is the sense of unity and purpose, some form of national unity. The kind of belligerence being spoken of today is clear that people have gone into their trench, and they are not coming out."
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