Tuesday Column By VICTORIA NGOZI IKEANO
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It is now five months since the Bola Tinubu administration took office and it is expected to have settled in by now, notwithstanding the ‘distractions’ from the rather drawn out litigations that engendered mudslinging from the opposition while they lasted. President Tinubu had said that his administration would hit the ground running, stressing that he does not have the luxury of time. However, it has been five months of pains for the generality of Nigerians, triggered by the economic reforms instituted by the president, immediately he was sworn, from the very first day of the Tinubu presidency. First was the removal of oil subsidy which saw retail price of petrol shooting skywards. As at today, petrol sells for an average of N680 per litre at filling stations. This is multiple fold rises over pre-May 29, 2023 retail pump price. And fuel being an important energy component for domestic, business use (given our unreliable electricity supply) as well as transportation of goods and services from point A to point B, it immediately sent prices of goods and services skyrocketing. Price of diesel used mainly by industries has hit the roof at N1000 per litre. The foreign exchange market was similarly liberalised, left to the forces of supply and demand. The result was a free fall of the naira vis a viz the dollar, to an unprecedented exchange rate of over N1000 to one dollar at the parallel market. Since Nigeria is an import-dependent country, the drastic depreciation of the naira in relation to the dollar, the currency of international trade. led to further unprecedented spikes in prices of goods and services. And the ultimate result is that more and more Nigerians are sliding into poverty levels.
Mr. President acknowledges our pains and is begging Nigerians to endure, averring that they are only temporary while likening them to labour pains that are followed by bundle of joy. We are told that those rather harsh measures are necessary to save the Nigerian economy from collapse. Although President Tinubu had been saying rather cautiously that he inherited both liabilities and assets from his predecessor, some senior members of his administration have said pointedly that it inherited an empty treasury. And a respected Economist who was a former governor of the Central Bank (CBN) stated recently that this government was literally handed a “dead economy”. Then arises, the question, when shall Nigerians begin to smile, when shall the economic pains start to ease? In my estimation the earliest time we should start seeing some light in the tunnel is this. December and the latest is next year, 2024. This is based on when the various bilateral and multilateral investment summits/meetings attended by President Tinubu in the last six months including its local initiatives would begin to bear fruit. Next year’s 2024 federal budget of N27.5 trillion is expected to be presented by President Tinubu to the national assembly last week
In June soon after he was sworn in President Tinubu was in France, for ‘’A New Global Financing Pact” summit. According to the presidency, Mr. President apart from the official summit also used the opportunity to hold high-profile meetings with heads of state and governments, global business leaders, chief executives of leading multilateral and development finance institutions. Then after the Id-el-Kabir (Sallah) festivities, the president headed to India for the G20 summit on September 9th and 10th. It was reported that Nigeria got pledges of about 14 billion dollars to reflate its economy. The investment pledges were detailed as follows: Eight billion dollars by Indorama Petrochemical Limited for expansion of their petrochemical facilities in Rivers state; 1.6 billion dollars in the power sector by SkipperSell Limited through construction of 2000 megawatts of electricity plants across Nigeria in four years; Jindal Steel and Power Limited to invest three billion dollars in iron ore processing; Bharti Enterprise to invest 700 million dollars in telecom, space communication, real estate, insurance and hospitality sectors; one billion dollars investment pledge for the Defence Industry Corporation of Nigeria (DICON). President Tinubu and his entourage stopped over at the United Arab Emirate (UAE) on his way back home where they sealed more deals in that country.
Soon enough he and a select delegation were off to for the 78th United Nations General Assembly wherein he addressed the world on September 20. And as is now usual, he held bilateral talks with some presidents of some countries, among them, Germany, korea, etc., wooing them to come invest in Nigeria. President Tinubu headed to the Kingdom of Saudi Arabia for the Saudi – Africa Summit and the Arab – Africa summit scheduled for November 10 and 11, coming back with some investment packages in especially oil and gas sectors. He also got pledge of financial support from the Islamic bank; just as the country had received promises of loan support from the World Bank, African Development Bank (ADB) and other international finance and development organisations. Pledges, investment commitments and financial support from all of aforementioned economic shuttles by President Tinubu over these past months should begin to trickle in from this December.
Regarding local initiatives, Chairman of Dangote Industries Limited (owners of Dangote Refinery in Lagos) Alhaji Aliko Dangote missed the August date he gave Nigerians for roll out of products from his refinery when it was commissioned with pomp and ceremony by former president, Muhammadu Buhari. He now says it will start producing some 300,000 barrels of petrol yearly “soon”, promising that this would be scaled up to its full yearly production capacity of 600,000 barrels by end of December, 2024. But some other refineries are expected to come up in December. For example there is one in Imo with small installed capacity though. And we are told that rehabilitation of the comatose Port Harcourt refinery would end in December to enable it start production again. Minister of state in charge of gas has set up a committee to remedy the supply hiccups that has shot price of this product to N1,100 per kilogramme (kg) up from the former N700 per kg. Irony of it all is that Nigeria is blessed with an abundance of gas, much of which is wasted through flaring, unexploited. Government says it is already taking steps to crash the naira exchange rate through the Central Bank which essentially involves the CBN paying off its accumulated debts. With expected passage of the N27.5 trillion 2024 budget by end of the year, this administration should ensure that the goodies therein are implemented speedily so that by first quarter of next year, Nigerians can begin to be economically relieved. Otherwise, if Nigerians don’t begin to see any positive signs in this regard by then, government would be tasking endurance of Nigerians beyond reasonable limits.