Tinubu’s economic reforms and prospects for prosperous future

By Adebanjo Mokolu

When President Bola Tinubu took office at the helm of Africa’s largest democracy, he said in my inaugural address that Nigeria is “too great a nation and too grounded as a people to rob ourselves of our finest destiny.” It was a statement of commitment to govern and not rule, to consult and dialogue but never dictate. Now that we are a year into the Tinubu era, it would be useful to reflect on its achievements and the foundations it is building for a prosperous future.

President Tinubu inherited an economy that despite its latent advantages – abundant natural and mineral resources, a warm year-round climate that guarantees high agricultural output, proximity to key world markets in the East and West and a world-class education that consistently produces some of the world’s best doctors, engineers and creative talent – was underperforming. Over the past year, it has spent time pruning the rough edges while tackling some of the big ‘untouchables’ of Nigerian politics.

On day one, expensive fuel subsidies that disproportionately disadvantaged lower-income Nigerians were removed and with those savings, the government has embarked on a programme of reinvesting in infrastructure, including new airport terminals, upgraded seaports, refurbishing roads as well as improved primary healthcare centres and basic educational facilities. All of this has meant that Nigeria is growing at the fastest pace since the Covid-19 pandemic; new numbers showing an almost 3% growth in Q1 2024 following 3.46% in Q4 2023.

The power sector has also been liberalised to better serve the millions of Nigerians that the former national power company has historically underserved. We removed subsidies which benefited about 15% of customers and authorised an increase in tariffs in order to position the private electricity providers, and the wider sector, as an attractive investment proposition. The new Electricity Act, one of the first laws President Tinubu signed in June 2023, has strengthened the governing structure of the electricity regulator, including empowering it to severely sanction electricity distribution companies for infractions relating to billings and power supply.

By introducing a 5-tier billing system, the administration has incentivised players to supply electricity at market-reflective rates to those who can afford it while guaranteeing electricity access for everyone and protecting low-income households from the highest tariffs. As a result, Nigeria is generating more electricity than it ever has and the country’s 11 distribution companies are setting new records for billings, collections and revenue recovery. The government is also relentlessly committed to connecting more Nigerians to electricity; days ago, the President approved a $750 million World Bank funding for the construction of 1,200 mini-grids in rural communities across the country.

More Nigerians are employed in agriculture than in any other activity. The twin challenges of food security and climate change have made it imperative for the Tinubu administration to future-proof our agricultural systems. Through the dry season farming initiative which aims to ensure year-round farming and bolster food production, wheat, rice, cassava, and maize cultivation has been expanded on about 500,000 hectares of farmland.

States such as Kebbi are now a hub of tomato farming and processing in the country through public-private collaboration that has led to the development of one of the biggest tomato paste factories in West Africa. Niger State has been able to attract $1 billion in investment for agricultural mechanisation and technology within the past six months. Nationally, we are currently in the middle of a quiet hydroponic revolution where residents in urban areas are growing herbs, lettuce, tomatoes, peppers, cucumbers, and peppers in nutrient-rich water solutions. This has ensured that many families are now unlocking a supplementary income stream. The government’s policies have been instrumental in supporting and enhancing this segment of the agricultural sector.

Despite these great first steps, more remains to be done. The government is in the process of simplifying our tax laws to make it easier for businesses to invest in their people and processes as well as streamline government processes by utilising smart policy setting and technology. It is now easier for Nigerians to go abroad through a new and seamless passport application process which has cut the average time from about six weeks to three. Additionally, visiting Nigeria from any part of the world is now much easier through enhanced e-visa protocols. The Presidential Enabling Business Environment Council is working night and day to ensure that our entrepreneurs and investors can obtain permits, rent office space and file compliance documents seamlessly. Over the next few months, more initiatives and programs in this direction will be rolled out.

As Africa’s primary oil and gas producer, energy has always been a critical part of our economy. The current administration has strengthened recent laws and regulations to grow the share of oil and gas that is produced by Nigerian companies as well as Nigerian talent in the foreign companies which operate in our market. The Petroleum Industry Act and the new regulatory bodies that have been created have introduced certainty and market access after almost two decades of operator uncertainty about their investments in our country.
The Tinubu administration has expanded our security footprint to safeguard critical energy assets and squarely address the security challenges – particularly oil theft and pipeline damage – in the oil-producing Niger Delta region. Working collaboratively with the 6 states in the region, the security agencies are making record seizures of illegally obtained crude products as well as uncovering a near-record number of illegal pipe connections. We are also making important investments in building a clean energy economy. The President has established and will chair a committee on climate action and green economic solutions which will coordinate and oversee all policies and programmes on climate action and green economic development.

Important challenges remain. Inflation is moderating but from a high price point. That’s why the administration is investing in the most important resource any nation can have, its people. The national social investment agency has been retooled to serve better the 15 million vulnerable households it will provide conditional cash transfers to ride out the cost of living situation among its other interventions. There is now a consumer credit corporation with a mission to accelerate consumer credit access to 50% of working Nigerians by 2030 to innovate and build our economy of the future. 1.6 million Nigerians have already applied for its flagship consumer credit scheme.

In Africa, democracy is having a tough moment. Governments across the continent are under pressure to deliver on the often-called dividends of democracy – security, education, increased living standards and a certain future. In the middle of West Africa, there’s a government that, despite fits and starts, is rising up to the challenge. Just as he pledged during his electoral campaign, it appears that President Tinubu is poised to make this a truly historic Nigerian moment.

-Mokolu is an economist and public affairs commentator. He writes from Ibadan.

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