An open letter to President Bola Tinubu on the economic hardship in Nigeria – By Mahmud Shuaibu Ringim

The 1999 Constitution, as amended, grants specific powers to the Federal Government, headed by the President, the state governments, led by Governors, and the local governments, overseen by Chairmen.

Consequently, the powers of these three tiers of government are clearly outlined in unambiguous terms.

The President holds overarching authority on fiscal and monetary policies, foreign policy, and defense against external aggression. Conversely, Governors’ powers are limited to domestic policies tailored to their respective areas of operation.

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Economic policies are determined by the President, which is why the Constitution established the National Economic Council. Chaired by the Vice-President, it includes the 36 state governors, ministers of finance, economic and national planning, the Accountant General, and the Attorney General of the Federation. This body advises the President on general economic policy to create a robust economic environment for the populace.

During President Obasanjo’s tenure, the Debt Management Office was created to manage Nigeria’s external and internal debt portfolio and advise on debt obligations. It was during this period, with Mrs. Okonjo-Ewella as the Minister of Finance, that Nigeria secured debt forgiveness and restructuring from creditors, notably the London and Paris Clubs. This debt relief opened a new chapter for Nigeria’s economy.

However, President Tinubu’s economic policies, enacted on his first day in office, have generated significant economic turbulence. International media, such as the New York Times and Financial Times, have critically assessed these policies, indicating that they have plunged Nigeria into its worst economic crisis in generations.

The current economic plight of Nigerians is largely attributed to the sudden and unprepared withdrawal of subsidies on petroleum motor spirit, the floating of the Naira, new tax regimes, and increased electricity tariffs. While it is understandable that President Tinubu inherited an economy in distress—with huge external debt, a collapsed manufacturing sector, an overstretched financial market, rising unemployment, and a struggling working class—his immediate economic measures have exacerbated these issues.

It would have been prudent for President Tinubu to assemble an economic team to thoroughly evaluate various scenarios and choose the least painful options for citizens. The longstanding issue of subsidies and non-functional refineries, kept idle by powerful interests yet retaining staff to avoid industrial unrest, needed a strategic approach.

An indigenous investor, Aliko Dangote, took on the challenge by establishing a refinery to address the subsidy issue and the inefficiency of NNPC-owned refineries. The success of Dangote’s refinery could significantly reduce the need for subsidies, but this requires the refinery to operate without obstruction.

To ensure the survival and success of Dangote Refinery, it should be listed on the Nigerian Stock Exchange, allowing the promoter to offload a substantial stake through private placement and initial public offering. This would share the risk with subscribers and potentially attract significant capital gains, emulating successful models like South Korea’s DAEWOO.

Supporting Dangote Refinery alongside NNPC refineries could eliminate the subsidy issue permanently, benefiting the Tinubu administration. This would reduce pressure on the Naira, save foreign exchange, and boost foreign reserves.

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Additionally, President Tinubu should establish an Industrial Resuscitation Fund to revive closed and moribund industries, focusing on those previously producing locally but now relying on imports. This would create jobs, generate wealth, and strengthen the Naira, as many such industries use local raw materials.

The route to economic buoyancy is not through tax increases but through efficient infrastructure that drives growth. Uninterrupted electricity supply and robust rail transportation are critical components for economic revival.

President Tinubu is urged to adopt an inward-looking approach, similar to China, India, and Russia. Neo-liberal economic prescriptions from the IMF and the World Bank have failed in countries like Argentina and Ghana. It is time for Nigeria to join BRICS and be part of the emerging new world order.

President Tinubu needs to put the pieces together and demonstrate his capabilities and administer the necessary measures to set the country on the right path. He holds the potential to make Nigeria great again.

Mahmud Shuaibu Ringim

HALIM Consulting Ltd

mahmudshuaibu44@gmail.com