Analysing Tinubu’s $1trn GDP Growth In 3 Years

Encumbered by the biting economic reality that have taken a heavy toll on the welfare of Nigerians, and particularly, the untamed freefalling of the Naira immediately after reunification of the exchange rate by the government, President Bola Tinubu is targeting a $1trn gross domestic product (GDP) within the next three years. He is targeting this objective with his ongoing economic reforms aimed at repositioning the economy. The President at the inauguration of his cabinet had unveiled an-8 point economic agenda with priorities on food security, economic growth, job creation, access to capital – importantly, consumer credit; improved security, provision of enabling playing field for people and companies who operate in the economy, rule of law, and fight against corruption. He also promised an all-embracing inclusiveness, focusing particularly on youths and women. He also promised a new Central Bank of Nigeria that will be thoroughly professional, a catalyst for growth, and a stickler to its constitutional mandate, maintaining price and financial system stability away from the muddled interlope of fiscal responsibilities. Mr. Olayemi Cardoso, the CBN Governor, affirmed this during his submission at the National Assembly. He told the legislators that efforts were ongoing to refocus the economy and the Central Bank of Nigeria for an overall economic rebirth. He said the federal government has fashioned fiscal reforms and growth targets that would make the feat attainable within the next three years, an ambitious plan that hopes to catapult the economy from its current Gross Domestic Product (GDP) of $450. He said a study of emerging markets’ macro-economic indices which particularly noted Nigeria’s economic trajectory, given faithful implementation of the ongoing economic reforms attest to it. With its youthful population and natural resources, aptly captured by the Minister of Communication and Digital Economy, Bosun Tijani in his 31- page document said, “in a world where digital transformation and innovation is fast becoming a catalyst for economic progress, we are at a critical moment as a nation in our journey towards a more inclusive, and prosperous future. The intersection of a strong digital economy and our innovative and youthful population presents us with a unique opportunity to chart a course towards prosperity, inclusion, and global relevance”. Other growth facilitating ministries and agencies like the Ministries of Industry, Trade and Investment, Science, Innovation and Technology, Labour and Employment, Gas Resources, Foreign Affairs, Marine and Blue Economy, Power, Justice, and Tourism should also come out with employment and wealth enhancing/generating policies to make this objective a reality. While agencies like Nigeria Investment Promotion Council, Nigeria Export Promotion Council, Corporate Affairs Commission, Bank of Agriculture, and Bank of Industries to mention few should live up to their fiscal responsibility mandates to facilitate this task. It is doable. In achieving the objective, may be, was the creation and renaming of some ministries and agencies, including appointments of new helmsmen to pilot the affairs of some revenue generating agencies such as FIRS, CAC, and the Taiwo Oyedele Tax Reform Committee. The actions were pointers to achieving this objective. Cardoso had explained that the projection is achievable if the study of the economies of Brazil, Russia, India, China, and South Africa (BRICS) and Mexico, Indonesia, Nigeria, and Turkey (MINT) countries with similar populations and developmental characteristics is anything to go by. He continued, “Given this scenario, a refocused CBN, (sticking to its mandate) will better serve Nigeria through monetary policy interventions and advisory roles that will sustain the implementation of the administration’s fiscal proposals”. However, to achieve these laudable objectives the CBN Governor said the lines between monetary policy and fiscal intervention must be clearly delineated. He noted that, “much had been said of past CBN’s foray into development financing, such that the lines between monetary policy and fiscal intervention were blurred”. Therefore, in refocusing the CBN to its core mandate, there is a need to pull it back to mere advisory role that supports economic growth. The Bank, he promised, will now act as a catalyst in the propagation of specialized institutions and financial products that support emerging sectors of the economy. “ It should facilitate new regulatory frameworks to unlock dormant capital in land and property holdings,’’ he said. He listed other roles the CBN under his watch would be – accelerating access to consumer credit and expansion of financial inclusion for the masses, de-risking instrumentation to increase private sector investment in housing, textiles and clothing, food supply chain, healthcare, and educational supplies. Cardoso said he would exercise the convening power of the CBN to bring key multilateral and international stakeholders together to participate in government and private sector initiatives. The Governor however admitted that despite this envisioned task, the CBN does not possess the magic wand to be waved at Nigeria’s current economic realities as the problems facing the Bank are enormous and complex, but the Bank under his watch will do all that is necessary to turn around the fortunes of the Bank and the Nigeria economy in general. *Chisom Adindu writes from Umuahia, Abia State

Nigeria’s Q2 2.51% GDP growth rate, not inclusive –Uwaleke

Professor of Finance and Capital Market at the Nasarawa State University Keffi, Uche Uwaleke, has said that the Gross Domestic Product (GDP) released Friday by the National Bureau of Statistics is not good for a developing economy like Nigeria. According to Uwaleke, the growth failed to address the twin issues of poverty and unemployment. The first Nigerian Professor of the Capital Market said: “In my view, this identified growth pattern, weighted in favour of the services sector, is not healthy for a developing economy such as ours. “Little wonder, economic growth does not appear inclusive, reflecting in rising unemployment and poverty levels (new NBS methodology attempts to mask this).” The NBS in its Q2 2023 GDP report stated that Nigeria’s Gross Domestic Product growth rate slowed to 2.51 per cent year-on-year in the second quarter of this year (Q2 2023) compared to 3.54 per cent recorded in Q2 2022, The former Imo State finance commissioner noted that while the oil sector tanked considerably on account of reduction in crude oil production, growth was driven by the non-oil sector. “The Non-oil sector performance was powered by the Services sector (4.42%) especially by Telecoms, Trade, Financial services,  “Industry sector appeared hugely impacted by rising inflation during the quarter. Growth rate was negative at -1.94% compared to 0.31% in Q1, 2023 “The sudden removal of fuel subsidy in May could be blamed for the plunge in the Transportation sector by over 60 points from Q1 2023. “The Agriculture sector (comprising 4 activities, though dominated by crop production) printed a slightly improved performance over Q1. But, (shy of 2%) is still far from its pre COVID’19 levels, he said. To address the imbalance, Uwaleke insisted that it is “time we reset this faulty economic structure, leveraging technology, in favour of the productive sectors: Industry and Agriculture.”

Tinubu, subsidy, NLC and Nigeria’s economic turbulence

On May 29, 2023, during his inaugural speech, President Ahmed Bola Tinubu made a momentous decision to scrap Nigeria’s fuel subsidies, citing pressing budgetary concerns. However, this move triggered a staggering surge in fuel prices, widespread panic-buying of fuel, and a sharp increase in the cost of various essential commodities. The ramifications of the fuel subsidy removal have struck fear in the hearts of millions of Nigerians, particularly low-income earners who worry about their ability to afford transportation, education, food, and healthcare and other social amenities. In response to the government’s decision, the Nigerian Labour Congress (NLC), entrusted with the responsibility to protect and defend workers’ rights and well-being, vehemently opposed the move. Joe Ajaero, the NLC President, criticized Tinubu’s decision, asserting that it lacked careful consideration and predicted it would cause the country’s economy to regress by more than 50 percent within the coming weeks. In light of their objections, the Congress issued a seven-day ultimatum to the Federal Government, demanding the reversal of all “anti-poor” policies, including the petrol price hike. The NLC accused the government of showing disdain and contempt for the Nigerian people and declared a war of attrition on workers and the masses. Citing the strength of Section 40 of the 1999 Constitution as amended, the NLC announced on June 7 their intention to launch a nationwide protest on August 2, 2023, against the fuel subsidy removal. In response, the Federal Government took legal action, seeking to stop the union from proceeding with the proposed strike. The government argued that such industrial action could severely impact society and the nation’s overall well-being. In a ruling on an ex parte application, Justice O.Y Anuwe ordered the unions not to embark on any industrial action or strike pending the hearing and determination of the motion on notice, dated June 5, 2023. The court highlighted the potential disruptions to economic activities and essential sectors. Unfazed by the court’s injunctions, lengthy negotiation meetings, and warnings from the Federal Ministry of Justice regarding contempt of court, the NLC stood firm on their threat and flooded the streets with protesters on August 2. The demonstrations aimed to voice opposition against the recent fuel price hike, tuition fees increase in public schools, and the withholding of salaries for university lecturers and workers. Meanwhile, the government, through the Solicitor General of the Ministry of Justice, accused the NLC leaders of treating the order of the National Industrial Court (NIC) with contempt. Justice Beatrice Jedy-Agba asserted twice that the organized labour’s industrial action was illegal, as there was a subsisting interim order restraining the NLC from engaging in any industrial action. The government prayed the court to hold NLC President Joe Ajaero, Deputy Presidents Audu Aruba, Prince Adeyanju Adewale, and Kabiru Sani, General Secretary Emmanuel Ugboaja, TUC President Engr Festus Usifo, and Scribe/Chief Executive Nuhu Toro in contempt of court and commit them to prison. In response, the NLC condemned the industrial court and the Justice Ministry as “anti-democracy” agents, and they demanded the withdrawal of the lawsuit or face mass strike. Following discussions at the NLC’s NEC meeting in Abuja, the union issued a stern ultimatum, warning that failure to comply with their demand could result in a nationwide strike on August 14, 2023. This ongoing saga showcases the deep-seated tensions and concerns about the impact of the fuel subsidy removal on the lives of Nigerian citizens and the overall health of the nation’s economy. As both sides engage in a legal battle and the NLC continues its protests, the future remains uncertain, and the fate of Nigeria’s fuel subsidy hangs in the balance, even as ordinary Nigerians continue to bear the brunt.