Nigeria Under Tinubu


In the wake of Nigeria's decision to halt subsidy payments on fuel prices, the nation is grappling with a surge in energy costs that is threatening the livelihood of countless citizens, driving many into the clutches of poverty.
As the economy struggle to cope with the ramifications of this controversial move, accusations of presidential apathy have emerged, with critics pointing fingers at president Bola Tinubu for seemingly turning a blind eye to the plight of the suffering masses.

In his first 30 days in office approximately 4 million previously well-off Nigerians fell into extreme poverty, according to the world bank. Extrem poverty, as defined by the world bank, means that 4 million individuals who were once able to afford to spent more than $1.9 USD or 1,505.5 (based on the official exchange rate of June 24, 792.5), suddenly lost that ability. This is in addition of the 133 million nigerians who had become poor during the tenure of former president mohammadu Buhari as of 2022 as reported by world banks multidimensional poverty index survey.


However, instead of finding immediate solutions, the value of the dollar surge from 760 on June 28 to 900 in the following days, and fuel prices soared from 520/liter to 617/liter by August 1st, causing sharp increase in the country's already record-high inflation. According to data from the National Bureau of Statistics (NBS), Nigerian's inflation rate rose for the fifth consecutive time to 22.41 percent, reaching 17year high in may 2023, up from 22.22 percent in the previous month.


Solution?

Tinubu proposed a monthly payment of NGN 8,000 to 12 million of the "poorest of the poor" households, continuing a conditional cash transfer program that had failed to achieve its targets under former president Buhari. Buhari had claim to uplift 100 million nigerians from poverty through this program and related policies.

Additional, Tinubu suggested salary increase and transport incentives to certain cites, but this proposal overlooks the fact that only 720,000 or if you may 0.3% of Nigerian's estimated 224.1 million population are employed by the federal government. The entire combined workforce of all Nigeria's 36 States and the federal capital barely makes up 5% and a significant majority of them cannot afford the existing N30,000 minimum wage.

For example, Kano state, which boasts the largest workforce in the country, only has around 180,000 workers, and Lagos, the next largest, has approximately 100,433 workers. Even if we assume that the entire 60 million estimated employed Nigerians are paid the proposed minimum wage, which is practically impossible given today's inflation rates, only about 45% of Nigerian's would be able to earn enough income to cope with hardships cause by the new policies.

More revenue for the government?

Supporters of the new subsidy system have argued that it will increase government revenues, leading to improvements in infrastructure development, and while this is partially true, the impact is questionable. Since the official removal of subsidies on may 29, revenues from taxes and gas sales have surged to over N1.959 trillion in June 2023. This allowed the federal, state, and local government to share up to 907.05 billion after accounting for tax, debt services, and compulsory saving. This represented an increase of N120.893 billion from May 2023. However, the benefits of these savings are not equally distributed.

The first beneficiaries of these so called savins from subsidy removal are elected and appointed officials. On June 22, the chairman of the Revenue Mobilization, Allocation, and Fiscal Commissione ( RMAFC), Muhammad Shehu, announced an increase of salary for politicians, judicial and public office holders by 114 percent. While the presidency claimed it had not approved the review, it did not deny the proposal.

What is left for Nigerians?

Apart from the meager N8000 cash transfer , which the presidency has promised to review, it is unlikely yo have a significant impact on the growing inflation, even if we are to reach every Nigerian. The authorities have announced that mass transport buses will be deployed in Nigerian cities to alleviate transportation issues. However, this approach may not address the root of the problem.

The National Bureau of Statistics ( NBS) reported in May 2023 that 70 percent of Nigerian's population lives in rural areas. These rural regions are home to 80 percent of Nigerian's 133 million poor people. Unfortunately, the situation in these rural areas is expected to worsen due to ongoing terror threat that disrupt livelihoodz and displace farmers across thousands of villages. Regrettably, these vulnerable groups are not likely to benefit from the so called transpot incentives, indicating that the government's policies may primarily favor the rich while the poor continue to suffer further deprivation.

In essence, the proposed policies seem to have limited reach and may not effectively address the needs of the majority of the population living in rural areas, where poverty is most prevalent. Without comprehensive measure that directly target the rural poor and address the root cause of their hardships, the government's efforts may only perpetrate the growing disparity between the rich and the impoverished in country.

Ways out?

The removal of subsidies can indeed be a positive step, bit its success depends on careful timing and proper implementation procedures, which were not followed I this case. Therefore, it is crucial to review the current approach. If the federal government cannot retract the move entire and start over, it is essential to explore other ways to provide support to all Nigerians who are living below the current minimum wage, which is inadequate given the current realities.

To achieve this, several strategies can be considered

1. Revamping and Reactivating Refineries: Investing in the refurbishment and reactivation of the nation's refineries can lead to increased domestic production of refined petroleum products reducing the country's reliance on imports and potentially lowering fuel prices for consumers.

2. Supporting Industries and Creating Jobs: The government can focus on building and supporting industries that can absorb the growing number of unemployed graduates. This could help the generate more job opportunities and alleviate poverty.

3. Increasing Subsidies on Farm Inputs: To support famers and boost agricultural productivity, the government can consider increasing subsidies on essential farm input, such as fertilizers and seeds.

Rural Infrastructure Development: improving infrastructure in rural areas is essential for fostering economic growth and development in these region. Better roads, access to electricity, and other amenities.
4. Strengthening Security: Ensuring security in rural area is crucial for farmers to access their farm and conduct business without fear of threat or attacks. And last but very very important.

5. Government officials Sacrifices: It is Essential for government officials to lead by example and make sacrifices themselves. To move to increase the income and other largesse of politicians while the poor are bearing the brunt of subsidy removal suggest an unfair burden on the less privileged. This can lead to increased competition for political offices, potentially encouraging corruption. Ultimately, this could have serious implications for the country, pushing it toward the risk of becoming a failed state.

By considering these strategies and fostering a fair and equitable approach to subsidy removal and governance, Nigeria can better negative its economic challenges and work toward building a more sustainable and prosperous future for all its citizen and reclaim its pride as the giant of African.

Let the Poor Breath, Don't Suffocate Them

Source: The Light Bearer

Hmmmmmm!

A startling revelation from this master piece is this;

Additional, Tinubu suggested salary increase and transport incentives to certain cites, but this proposal overlooks the fact that only 720,000 or if you may 0.3% of Nigerian's estimated 224.1 million population are employed by the federal government.

Total workforce of federal government workforce is less than 1,000,00.

With all this brouhaha