How Nigeria’s Economy is Transforming Under President Tinubu’s Reforms, Minister Of Information, Mohammed Idris

Nigeria’s Minister of Information and National Orientation, Alhaji Mohammed Idris, has defended the economic policies of President Bola Tinubu, saying that they are necessary to address the structural imbalances and fiscal challenges facing the country. He also claimed that the reforms are already showing positive results in terms of growth, investment, and job creation.

What are the economic reforms?

President Tinubu, who assumed office on May 29, 2023, after winning the presidential election, has embarked on a series of economic reforms aimed at diversifying the economy, reducing dependence on oil revenues, curbing inflation, and boosting productivity. Some of the key reforms include:

Removing the fuel subsidy: On his first day in office, President Tinubu announced the suspension of the fuel subsidy, which had been costing the government billions of naira every year and creating distortions in the market. The subsidy removal led to an increase in the pump price of petrol from about N195 per liter to about N617 per liter, sparking protests and complaints from consumers and businesses. However, the government argued that the subsidy was unsustainable, inefficient, and prone to corruption and that the savings would be redirected to infrastructure, social services, and safety nets for the poor.

Unifying the exchange rate: In June 2023, the Central Bank of Nigeria (CBN) floated the naira, removing all restrictions on foreign exchange rates and allowing market forces to determine the value of the currency. The exchange rate unification was meant to eliminate the multiple exchange rate regimes that had created arbitrage opportunities, discouraged foreign investors, and depleted foreign reserves. The naira, however, depreciated significantly against the dollar and other major currencies, from around N462 to $1 in May 2023 to around N741 to $1 in February 2024, reflecting the high demand for foreign exchange and the low supply of dollars due to the slump in oil prices and the COVID-19 pandemic.

Implementing fiscal discipline: President Tinubu also pledged to reduce the fiscal deficit, increase the revenue base, and improve the efficiency of public spending. He said he would not rely on oil revenues to fund the budget, but rather on taxes, loans, and other sources. He also said he would cut down on wasteful and recurrent expenditures, and prioritize capital and developmental projects. He also promised to implement the Petroleum Industry Bill (PIB), which had been pending for over a decade, to reform the oil and gas sector and increase its transparency and accountability.

What are the impacts of the reforms?

According to the Minister of Information, Mohammed Idris, the economic reforms have started to bear fruits, despite the initial pains and difficulties. He cited some of the indicators and achievements of the reforms, such as:

• Growth recovery: The minister said that the economy had recovered from the recession that it entered in the third quarter of 2022, and had recorded positive growth rates in the last three quarters of 2023. He said that the growth was driven by the non-oil sector, especially agriculture, manufacturing, and services, which showed the success of the diversification efforts. He also said that the growth was inclusive and broad-based, as it had created more jobs and reduced poverty.

• Investment attraction: The minister said that the reforms had boosted the confidence and interest of both domestic and foreign investors, who had increased their investments in various sectors of the economy. He said that the exchange rate unification had removed the uncertainty and risk that had deterred investors and that the removal of the fuel subsidy had opened up opportunities for private sector participation in the downstream sector. He also said that the government had improved the ease of doing business and the regulatory environment, and had provided incentives and guarantees for investors.

• Inflation moderation: The minister said that the inflation rate, which had risen to 24.08% in January 2024, had started to moderate in February 2024, as the effects of the reforms began to kick in. He said that the inflation was mainly caused by supply-side factors, such as the increase in fuel and food prices, and that the government was taking measures to address them, such as increasing local production, improving distribution networks, and providing subsidies and palliatives to the vulnerable groups. He also said that the CBN was implementing a tight monetary policy to curb excess liquidity and stabilize the exchange rate.

What are the challenges and prospects of the reforms?

The minister acknowledged that the reforms were not without challenges and criticisms and that the government was aware of the hardships and grievances of the people. He appealed for patience and understanding, saying that the reforms were for the long-term good of the country and that the benefits would soon outweigh the costs. He also assured that the government was listening to the feedback and suggestions of the stakeholders and that it was ready to make adjustments and corrections where necessary.

He also expressed optimism about the prospects of the reforms, saying that they would position Nigeria for a more sustainable, resilient, and prosperous future. He said that the reforms would enhance the competitiveness and productivity of the economy, attract more investments and innovations, create more jobs and wealth, and improve the living standards and welfare of the people. He also said that the reforms would enable the country to cope with the shocks and uncertainties of the global economy, such as the volatility of oil prices, the impact of climate change, and the effects of the COVID-19 pandemic.

He urged the people to support and cooperate with the government, and to take advantage of the opportunities and potentials that the reforms had created. He also called on the media, civil society, and other partners to play their roles in informing, educating, and mobilizing the public on the objectives, benefits, and challenges of the reforms. He said that the government was committed to delivering on its promises and mandate and that it was counting on the patriotism and resilience of the Nigerian people.