The year 2024 was gruesome for many, globally, what with the wars, violent crimes, civil strife; just name it. Many parts of the world became like William Butler Yeats’ widening gyre. It was no wonder that many looked so forward to 2025 that the new year was ushered in with some kind of gusto that belied all the whining about bad economy. May be the excitement stems from the resolve by many that even though 2024 left footprints tears and blood, the emotional turmoil most not be allowed to endure as we brace up for a new year that should be different.
In Nigeria, President Bola Tinubu did a fairly job of giving a not too sombre new year broadcast. Unlike previous communications that drip with arrogance, insensitivity and propaganda, this new year message was temperate and contained realistic promises that one can relate. The only major flaw is that there is still a big gap between what the citizens expected to hear and what their president was telling them. For instance, not a few Nigerians are yet to be convinced that the economic policies of the administration is headed in the wrong direction and are waiting for the president to announce a review.
As one of the anchors on Arise TV Morning Show brilliantly captured it yesterday, January 1, 2025, the Federal Government of Nigeria has unabashedly adopted a Neo-liberal economic development model that is anchored on dictates by the Bretton Woods Institutions. Put simply, Nigeria has adopted a fully fledged capitalist agenda in its economic planning principle. So, at least for now, there is no room for any form of subsidy or subvention and those who are still waiting and hoping that Mr. President would backtrack on his reform agenda are not only wasting their time waiting for a bus that would not come, they are at the wrong bus stop altogether! Now that the President and the Federal Executive Council have crossed the Rubicon, the question is whether Nigeria ready for a capitalist economic model? Or, our we merely putting the cart before the horse? May be the President, those working with him and his cheerleaders need to be reminded that economies are PLANNED, and not DICTATED. As it is often said, there are many ways of killing a chicken, but the challenge lies in deciding which is the best way, which, however, is not like reinventing the wheel.
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Creating chaos or causing massive destruction in the socioeconomic fabric of the society just because you want to proffer or find the solution to a recurring problem does not look like a smart approach to development or economic planning. After all, others have traversed the route, and we should be able to learn from their experience. One of the most important difference between any two individuals or countries in today’s world is most likely to be their capacity to create wealth. In this instance, Nigeria has the unique advantage of being a resource-rich and high-earning economy where the major challenge is the management of the wealth of the nation. It is true that time is of essence, but the regime has four years in the first instance, to commence the reform process, and it is entitled to another term of four years, if the electorate is convinced about the efficacy of the approach. The point being made here is that there is rarely an alternative to an organised planning that is thorough and methodical, if the outcome is expected to endure. In this instance, the more sustainable approach is a bottom-up strategy that enlists the buy-in of the enlightened segment of the populace.
At the moment, the content and manner in which the President Tinubu Economic Reform Programme is being deployed may deny it needed integrity for it to endure. A substantial segment of the Nigerian populace feel unduly burdened by a set of reforms they are unable to connect with. Only yesterday, the former governor of Kano state, Senator Ibrahim Shekarau emphasised the point that part of the reasons many are resisting the Tax Reform Bills is because they feel excluded from the administration of President Bola Tinubu. Second, apart from the bias in the choice of officials to drive the policies of the government, it does not enjoy the buy-in of a lot of the people for which they are intended. Even the civil service is ill-conditioned to drive the policies. This leads some to wonder whether it would have not been more appropriate to commence with the reform of the service, cut the cost of governance, right-size the workforce and upwardly review the system of emolument before introducing some of the reforms?
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The damage that has been wrought on the average self-employed Nigerian by the withdrawal of subsidies on petrol and electricity is humongous. In 2023, Nigeria’s poverty rate was estimated to be 38%, with 87 million Nigerians living below the poverty line. According to a World Bank report, 14 million more Nigerians are estimated to have fallen into poverty in 2024 due to stagnant labor incomes in the face of escalated cost of living. This brings the total number of Nigerians living below the international poverty line of $2.15 per day to nearly 47%. These figures are conservative, because poverty has become quite pervasive in Nigeria as of today. The signs are there for all to see: the hunger protests, the violent crimes, stampede at food sharing venues, ugly sights of desperate destitution, meteoric rise in mental health issues, fall in life expectancy rate, huge out-of-school population and rising rate of school dropouts, etc. Yet, the administration believes that the reform in their present format must be seen through. That what Nigerians need are palliatives, CNG buses, enhancing access to credit through the establish of a National Credit Guarantee Company, provision of student loans by an education bank, instilling the spirit of patriotism in Nigerians through a national re-orientation campaign, and so on and so forth.
In conclusion, and to further elucidate on the point about the need for proper planning, it is now crystal clear that the administration has failed woefully to appreciate the fact that you can not put something on top of nothing, to paraphrase an axiom of the legal profession. Apart from an institutionalised mass based political system, which practice is still largely flawed, Nigeria, as it presently is, lacks the basic fundamental requirements for a Ne-liberal economic system to thrive. First, on paper, Nigeria is a rich country, but in real terms, it is very poor country. Put otherwise, Nigeria is a rich country of poor people as the household disposable income per capita in 2024 was US$0.72 (about N1,11.74). This is projected to decline to US$0.70,000 per capita in 2025. In other words, the average Nigerian still does not earn enough income to survive in the ecosystem that is currently being hoisted on them. This is what economists refer to when they advise the federal government to adopt a gradualist approach in its reform programme.
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So, the advisable strategy is for the government to introduce measures to build back the purchasing power of the average citizen. And this can not be achieved through palliatives or cash transfers but through adoption and implementation of a robust and sustainable strategy that entails the following:
- Tackle Insecurity, Poverty: Insecurity is the negative elixir that fuels most of the headwinds against socioeconomic progress in contemporary Nigeria. Insecurity and poverty are intertwined and mutually re-enforcing. Affordable food supply is the silver bullet that has the potential to tackle both evils. So, the federal government may do well to bring the governors onboard and sensitise them to realise the imperative of a partnership across party lines to address the two problems through an agrarian revolution.
- Reform civil and public services to nip corruption in the bud and cut the cost of governance. For the civil service, it may be necessary to incentivise the dead woods to retire; then right-size, retrain the workforce and review the pay package to enhance discipline and productivity. The President must display the same courage he has exhibited in the withdrawal of subsidies by introducing similar cuts in the cost of governance. The current Animal Farm approach of not acting based on your preaching does not cohere. If not addressed, the president can be assured that his successor in office may throw away most of his policies.
- Upgrade existing infrastructural facilities to support industry and commerce. This will be the right point to withdraw subsidies, review tariffs and introduce tax reforms.
