Hot SourceWENESO OROGUN assesses the economic consequences of the administration
Two years into the Tinubu Presidency it is increasingly unclear whether the politician steering our ship of state is a democrat or a despot. Is president Tinubu a progressive politician or a defender of elite privileges? Is the president committed to an anti-corruption war or he’s happy to encourage corruption in high places? The suffocating ambivalence that pervades the character of the All Progressive Congress (APC) government led by President Bola Ahmed Tinubu is most prevalent in the degree of economic illiteracy exhibited by the administration. Indeed, the second anniversary of the Tinubu presidency has given spokesperson and party faithfuls ample opportunity to crow about achievements of the APC government since May 2023. Admirers list the achievement of the government to include:
One, inflation declined from 34.8 percent to 24.48 percent by February 2025.
Two, GDP rose by 3.8 percent, marking its highest level in five years.
Three, debt servicing reduced from 97 percent to 68 percent.
Four, Payment of $5billion in outstanding foreign exchange obligations.
Five, Raising revenue generation to over N9.1 trillion. Six, Growing the trade surplus from 209.6 percent to N18.86 trillion in 2024.
Seven, Huge increase in federal allocations to all tiers of government. Eight, the adoption of a unified foreign exchange system aimed at strengthening economic stability.
Nine, disbursement of N45.6 billion in students loan. And ten, increasing the minimum wage from N30,000 to N70,000.
The framing of the showcased successes of the Tinubu-led government reveals a disturbing trend over the last decade of the APC governments. The trend has to do with the retreat of professional economics from public life that became evident during the President Muhammadu Buhari Era. Non economists began to play roles traditionally reserved for economics. Policy modeling and scenario building took the back seat. The Nigerian Economics Society (NES) could not find it voice. Most individuals who offered to help were shunned with ignominy. Professor, Doyin Salami of the pan-African University Aja Lagos who awkwardly emerged as chief Economic Adviser to PMB was not allowed any modicum of visibility. Perhaps professor Salami will one day write a book and what it was like to advise PMB on economic management. President Tinubu took this unfortunate style to dizzy heights with the appointment of Mr Yemi Cardoso, a student of management science, as Central Bank of Nigeria (CBN) governor. The rest of this contribution will highlight some of the economic consequences of the Tinubu presidency. One notable economic consequence is the financialization of performance metrics. This involves giving pride of place to financial aggregate to the neglect of socio-economic progress such as:
The number of jobs created over a given timeline (Monthly, Quarterly, or Yearly). Another similar measure of progress is the number of people pulled out of poverty due to implementation of specific government policies. Also relevant is the reduction in the level of inequality in the distribution of income.
The CBN governor seeks external validation for his policies. Cardoso grins with satisfaction when the international Monetary Funds (IMF) and the World Bank tell him to stay the course with his tight monetary policy stance. He’s happy to vote for a Monetary Policy Rate (MPR) of 27.5 percent at a time when the interest rate payable by the real sector for bank lending is as high as 25% percent. Bank lending to the real sector is as high of 35%.
Regrettably, Cardoso believes in the efficacy of his monetary policies when household expenditure in Nigeria is not driven by bank credit. If President Tinubu has shopped for the right person for the job of CBN governor, the number one priority would have been how to grant access to private sector operatives to chip funds, to revitalize the economy. Not being a member of the Adam Smith Fraternity, Cardoso exhibits a high degree of willingness to sacrifice employment for inflation control. The reason is simple. He is not familiar with the Phillips Curve of Economics 301. Even after a controversial inflation rebasing exercise the alleged reduction in the inflation rate remains unimpressive.
The inflation rebasing conducted by the National Bureau of Statistics(NBS) is the most potent evidence that the national statistical agency has lost it independence. This is clearly demonstrated by the decision of the MBS to put house rent and energy cost in a single basket to which it attached only 16 percent weight. The alleged reduction in inflation rate remains unimpressive because the MBS is trying hard to make the Tinubu administration to look good. Anyone who is unconvinced about this point should reflect on the changes MBS methodology for calculating the rate of unemployment. The Tinubu government is happy today to state that unemployment rates in Nigeria is in single digit. The methodology that MBS discarded have pulled the employment rate at over 30 percent. These two unacceptable decisions by MBS have artificially reduced the misery index in Nigeria.
The CBN governor believes that inflation in Nigeria is due to too much money chasing too few goods. This is wrong. Nigerian inflation is powered mainly by supply side rigidities which prevent the real sector from responding positively to local demand. In this regard, the success of monetary policy will depend largely on innovative fiscal policy and security operations that encourage farmers to go to their farms with fat molestation by armed herders and terrorists. Recent estimate indicates that 2,347 farmers were killed by herders between 2020 and 2024. How can food prices reduce substantially in a situation like this? In addition the country lacks storage facilities that will help to reduce post harvest losses. The Tinubu administration ignores the timeless advice of the late British Development Economist, Sir Daudly Seers that to access the outcome of economic refunds we should ask through simple questions: What is happening to poverty and what is happening to employment? The World Bank whose advice means so much to the CBN governor as indicated that many more Nigerians may fall below the poverty line by December 2025 under the watch of President Tinubu.
As for employment figures, the government prefers to talk about plants and programs to generate employment without indicating how many people have joined the payroll of the organized private sector. Have members of the Manufacturers Association of Nigeria (MAN), the Lagos Chamber of Commerce and Industry (LCCI) and the National Association of Chambers of Commerce, Industry, Mines and Agriculture (NASIMA) employed more hands in the last two years?. What is the Purchasing Managers Index (PMI) saying about the fortunes of the organized private sector over the last two years? How many Manufacturers have benefited from the easier access to financing promised by the Tinubu government? A third economic consequence of the Tinubu presidency is the seeming infatuation with GDP growth. It is well known that the Nigerian economy grows at over 7 percent per annum in some years during the tenure of President Goodluck Ebele Jonathan (GEJ). However, due to the highly skewed distribution of income in Nigeria the high GDP growth did not translate into shared prosperity.
Given that an estimated 10% of Nigerians own 32.5 percent of National Income, while, 1% of the population controls 43 percent of the GDP, it will remain a pipe dream for GDP growth to lift a substantial number of Nigerians out of poverty. This is one reason perceptive observers of the Nigerian drama are disappointed that after two years in office President Tinubu has failed to make a success of his much- touted safety nets such as the conditional cash transfer scheme. Administration officials talk glibly about giant infrastructure projects like the 700Kilometre Lagos-Calabar coastal highway at a cost of N13 trillion. They forget the well known paradox of Nigeria’s public finance where the bigger the approved budget the more Nigerians experience misery and poverty. The government activities could create a few more billionaires but the majority of the people will be left behind. The Tinubu presidency has not told Nigerians how it intends to make a difference in this regard.
The desecration of the office of the CBN governor has happened before. General Murtala Mohammed once named the late historian and newspaper editor, Mr Adamu Ciroma governor of the CBN. When reminded that his nominee was an historian the General is reported to have said: ‘The General does not change his mind, let Adamu Ciroma go and serve her CBN governor’. The new appointee had enough presence of mind to leave Monetary Policy modeling and analysis to the professional economists while concentrating on improving staff welfare. Some suitable appointments to the office of the CBN governor have also been made. This include: Dr Clement Isong, Professor Charles Chwukuma Soludo, current governor of Anambra State; and Mr Lamido Sanusi Lamido, the embattled Emir of the Kano. These were all trained economists. Lastly, several accountants have sat on the chair dignified by Dr. Clement Isong. These include: Mr. Ola Vincent, Mr. Abdulkadir Ahmed, Dr. Joseph Sanusi and the beleaguered Godwin Emefiele. As the President Tinubu administration enters its third year in office the last has not been heard of the alleged successes of his first two years.
Orogun is our Former Editor-at-Large
