Yesterday, President Bola Tinubu stressed that Nigerians must bear the present economic suffering as a price to establish a “balanced” and just economy.
The President expressed his understanding of Nigerians’ “hardship” in a nationwide broadcast, but he hoped “there were other ways” to create an inclusive economy.
“You are suffering as a result of the challenging period our economy is going through. The price of petrol has increased. Prices for food and other goods have followed. Families and companies face difficulties. Things seem tense and unreliable. I am aware of the struggles you go through. I wish there were other options.
“However, there isn’t. In a prepared address given at 7 o’clock, Tinubu stated, “If there were, I would have followed that way because I came here to serve, not destroy the people and country that I love.He remembered the disparity brought about by the “preferential” exchange rate arrangement and fuel subsidy payments, which led to the bulk of Nigerians being poorer and “the elite of the elite” becoming wealthier.
“This group had accumulated so much money and influence that they posed a major danger to the integrity of our democratic government and the fairness of our economy. To put it bluntly, as long as such tiny, strong, and unelected organizations continue to have significant influence over our political economy and the institutions that regulate it, Nigeria will never be the society that it was meant to be.
“The whims of the few should never have a disproportionate amount of influence on the aspirations of the many. The people must be in charge if we are to be a democracy, not the power of money.
“The previous government also recognized this impending threat. In fact, it did not include any funding for subsidies beyond June of current year in the 2023 Appropriations.
It had become necessary to remove this once-useful equipment since it had turned into a burden on the nation, he said.
Additionally, Tinubu cited the former multiple exchange rate regime as one of the defective systems that led to the country’s impoverishment and the concentration of the economy in the hands of a privileged few. He said that the system “doled” out favorable conditions to a “tiny elite” in the nation for the resources that ought to have been utilized to generate employment.
The speech was loaded with adjectives like “elite,” “preferential,” “favorable,” and many more that imply the historically unjust course the economy has followed in recent years.
The President’s prior “I feel your pains” and “let the poor breathe” memes, which were characterized by millions of Twitter users who questioned his sincerity, also resounded throughout the address.
Since petrol prices increased by more than 15% over the previous two weeks, millions of internet users have mockingly called for the return of former president Muhammadu Buhari. Even if they are sarcastic, the calls convey the extent of the misery and the height of anguish that Nigerians have experienced since Tinubu took office.
The program was made precisely two months after he took power, at which time the country’s misery index, which compares unemployment and inflation rates, spiked and saw a considerable increase in cost of living.
The inflation rate last month rose to a fresh multi-decade high of 22.8%. to its highest point. The National Bureau of Statistics (NBS) issued a warning that the consumer price index (CPI) for July would accurately reflect the rise in gasoline costs and the ensuing adjustment in other items.
Yemi Kale, a former NBS director general and renowned statistician, had warned Nigerians that the withdrawal of gasoline subsidies would cause inflation to reach 30%.
The significant devaluation of the naira after foreign currency liberalization has made the prognosis for inflation worse. The value of the naira against the dollar has decreased by about 50% since June 14, when the Central Bank of Nigeria shut down the foreign exchange market.
Before the convergence, the exchange rate for the local currency was on average N463 to $1. It traded below N750/$ during the preceding week, finishing yesterday at 756.94/$ at the Investors’ and Exporters’.
The currency will close around N815/$ next year, according to the Economists Intelligence Unit, a worldwide research organization, and as the currency continues to depreciate in comparison to other currencies, the monetary authorities may be obliged to resort to stricter control.
Nigerians feel the effects of a dropping naira like a falling knife since the nation depends so heavily on imports. Dr. Chiwuike Uba, an economist, said that the exchange rate pass-through effect is responsible for up to 70% of the nation’s high inflation rate.
However, the President said in his address titled “After darkness comes the glorious dawn” that the nation will recover from the present hardships better and that its citizens would be more fortunate.
And he not only expressed sympathy with Nigerians going through agony, but also offered them comfort. The show, which took place at the same time as the screening of his cabinet candidates, also highlighted some of the policy initiatives he has planned to rescue the economy.
The President said he could end the present suffering in a miraculous way, but that what he would “offer in the immediate is to reduce the burden our current economic situation has imposed on all of us, especially on businesses, the working class, and the most vulnerable” instead.
He claims that the federal government is collaborating with state and municipal governments to put measures into place that would ease the suffering experienced by the most vulnerable members of society.
“We are planning to invest N75 billion between July 2023 and March 2024 to enhance the manufacturing sector, boost its potential to grow, and generate high-paying employment. Our goal is to provide funding for 75 businesses that have enormous potential for boosting productivity, accelerating structural change, and launching sustained economic development.”Each of the 75 manufacturing enterprises will be able to access N1 billion credit at nine percent per annum with a maximum 60-month repayment period for long-term loans and 12 months for working capital,” he added.
In order to improve the performance of actors in the private sector and generate employment, the president pledged an inexpensive lending regime during his inauguration address. He asked the CBN to start the process of obtaining loans that was reasonable.
Although the monetary policy rate (MPR) was increased by 25 basis points last week, it still remains low at 18.75 percent. According to experts, reducing the anchor interest rate gradually is the first step in obtaining loan that is reasonable.
According to statistics collected from the SME Finance Forum, the finance access gap for micro, small, and medium-sized firms (MSME) is projected to be $158.13 billion, or 99.94%, and is one of the primary drivers of development, Tinubu said. Therefore, the government will invest N125 billion to revitalize this crucial industry, the President remarked.
“Between now and March 2024, we will invest N50 billion on conditional incentives to one million nano companies. The 1,300 owners of nano businesses in each of the 774 local governments throughout the nation are to get N50,000 apiece as part of our goal.
In the long run, this initiative will promote financial inclusion by integrating its beneficiaries into the established banking system. Similarly, we would invest N75 billion in 100,000 MSMEs and start-ups. According to this program, each business promoter would be eligible to receive between N500,000 and N1 million with a 36-month payback term and 9% annual interest.
Following consultation with various stakeholders, the President announced that he has directed the release of 200,000 metric tonnes of grains from strategic reserves to households across the nation at fair prices. Meanwhile, 225,000 metric tonnes of fertilizer, seedlings, and other inputs will be given to farmers who are dedicated to the nation’s food security agenda.
“We are still on track with our aim to assist the year-round cultivation of 500,000 hectares of agriculture. Out of the N500 billion agreed by the National Assembly, N200 billion would be distributed specifically as follows: To produce 150,000 hectares of rice and maize, our government will spend N50 billion in each, and N50 billion in each will also be set aside to plant 100,000 hectares of wheat and cassava.
“This extensive agricultural initiative will be conducted with a focus on small-holder farmers and by using large-scale, successful participants in the private sector. To create a workable and suitable transaction framework for all parties, he said, the experience of commercial banks, microfinance banks, and development finance institutions would be drawn upon.
All Nigerians’ welfare would be improved, Tinubu promised, claiming that this goal is what keeps him up at night. He stated: “I authorized Infrastructure Support Fund for the States to reduce the effect of rising gasoline prices on transportation. With the help of this new infrastructure fund, States will be able to invest in pressing needs, alleviate many of their pain spots, and upgrade our aging healthcare and educational facilities.
“An important component of our approach is to deploy buses for mass transportation at a much lower cost throughout the states and local governments. We have budgeted N100 billion to spend between now and March 2024 on 3000 CNG (compressed natural gas)-fueled 20-seater buses.These buses will be shared with significant American transportation providers based on the amount of trip that each individual makes. Under this facility, participating transportation businesses will have access to finance at a nine percent annual interest rate with a 60-month payback horizon.
According to the President, a “new minimum wage is coming” and that proposals were being considered for approval. He said that during the last two months, the nation has saved over N1 trillion that would have been wasted on the useless gasoline subsidy.
