One year of Tinubu: Atiku condemns president’s ‘trial-and-error’ economic reforms, calls for strategic action

President Tinubu’s policies do not create prosperity. Instead, they pauperise the poor and bankrupt the rich. They spare no one. Nigerian citizens, the majority of whom are poor, are going through the worst cost-of-living crisis since the infamous structural adjustment programme of the 1980s – Atiku

 

Former presidential candidate of the Peoples Democratic Party, Atiku Abubakar, has launched a scathing critique of President Bola Tinubu’s economic policies, marking Tinubu’s first year in office as a period of “trial-and-error” reforms that have exacerbated Nigeria’s economic woes.

The former vice president made his position known in a statement posted to his verified X account on Tuesday.

On May 29, 2023, Tinubu pledged to remodel Nigeria’s economy to achieve growth and development, promising job creation, food security, and an end to extreme poverty. His vision included growing the economy at double-digit rates to reach a US$1 trillion GDP within six years. However, twelve months later, these promises remain unfulfilled, with many Nigerians experiencing worsened economic conditions.

A Year of Unfulfilled Promises

Tinubu’s tenure began with significant policy changes, including the elimination of PMS subsidies and a new foreign exchange policy that unified multiple FX windows into a single market. Further measures included tightening monetary policy to reduce Naira liquidity, hiking monetary policy rates, introducing cost-reflective electricity tariffs, and implementing a cybersecurity tax.

Atiku argued that these rapid-fire policies have led to greater macroeconomic instability. “Nigeria remains a struggling economy and is more fragile today than it was a year ago,” Atiku stated, pointing out that the country has slipped from Africa’s leading economy to fourth place, behind Algeria, Egypt, and South Africa.

Also read: Poor implementation of fuel subsidy removal impoverishing Nigerians, Obasanjo berates Tinubu

The Impact on Nigerians

Atiku highlighted the severe cost-of-living crisis faced by Nigerian citizens, with annual inflation at 33.69 per cent and food inflation at 40.53 per cent. Prices for essential goods have skyrocketed, with rice and flour increasing by over 100 per cent and fuel prices surging by 305 per cent. Despite these hardships, the minimum wage remains unchanged at the equivalent of US$23 per month.

He stated that the policies of the Tinubu-led administration “pauperise the poor and bankrupt the rich.”

“President Tinubu’s policies do not create prosperity. Instead, they pauperise the poor and bankrupt the rich. They spare no one. Nigerian citizens, the majority of whom are poor, are going through the worst cost-of-living crisis since the infamous structural adjustment programme of the 1980s,” Atiku said.

Also read: Fuel Subsidy is Gone, Tinubu Declares as He is Inaugurated as President

Business Environment and Foreign Investment

The former vice president also criticised Tinubu’s policies for creating a hostile business environment. High operational costs and exchange rate complexities have driven numerous multinational companies out of Nigeria, resulting in significant job losses. According to the Nigeria Employers’ Consultative Association (NECA), nearly 20,000 jobs may have been lost due to the departure of 15 multinational companies.

He lamented, “President Tinubu’s policies create a hostile environment for businesses, big or small. The private sector is overwhelmed by Tinubu’s dismal policies and overburdened by his failure to address the policy fallouts. The manufacturing sector, which holds the key to higher incomes, jobs, and economic growth, has been bogged down by rising input prices, higher energy and borrowing costs, and exchange rate complexities.

“For example, since 2023, the average price of diesel has doubled to N1,600 per litre. Electricity tariff has recently been increased by 250% from N68/Kwh to N206/Kwh. As reported by the Guardian (13 May 2024), in Q1 of 2024, energy prices were up by 70%, costing manufacturers N290 billion.

“Since May 2023, corporate Nigeria has lost more than a dozen enterprises to other countries. Unilever, GlaxoSmithKline (GSK), Procter & Gamble (P&G), Sanofi-Aventi Nigeria, Bolt Food, Equinor, among others had exited Nigeria citing reasons including foreign exchange complexities, security concerns, and high operational costs. According to the Nigeria Employers’ Consultative Association (NECA), nearly 20,000 jobs may have been lost due to the departure of 15 multinational companies from Nigeria.”

Foreign Exchange Policies and Trade Balance

Atiku noted that Tinubu’s foreign exchange policies have failed to improve Nigeria’s foreign trade balance. The devaluation of the Naira has not enhanced the competitiveness of local producers or boosted exports. Instead, Nigeria recorded a significant trade deficit of US$7.5 billion in Q1 2024.

Lack of Foreign Investment

Despite the unification of exchange rates, foreign direct investment (FDI) has declined by 26.8 per cent, from US$5.33 billion in May 2023 to US$3.9 billion in May 2024. Atiku attributed this decline to a lack of trust in Nigeria’s leadership and the effectiveness of its policies.

Calls for Strategic Reform

Atiku outlined six steps Tinubu must take to save Nigeria’s economy:

1. Pause and reflect on the necessary reforms and their sequencing.
2. Conduct a comprehensive review of the 2024 budget.
3. Revise the Social Investment Programme to support vulnerable households and businesses.
4. Avoid introducing new taxes or increasing tax rates.
5. Provide clarity on the fuel subsidy regime.
6. Address security issues to enhance agricultural production and economic stability.

“I have always been a reform advocate,” Atiku said, emphasising that he understands the appropriate reforms needed to mitigate negative impacts. He urged Tinubu to change course and adopt a more strategic approach to economic management.

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