The recent remarks by President Bola Tinubu and former Minister of Finance and Director General, World Trade Organisation (WTO), Dr Ngozi Okonjo-Iweala, about the desirability of the reforms embarked upon by the present administration a few years ago and the consequent stability it had brought to the economy has again brought to the fore, discussions on the state of the nation’s economy.

President Tinubu, while hosting stakeholders of The Buhari Organisation, had decided to blow his own trumpet, when he said his government had succeeded in stabilising the economy, and met its revenue target for the year, in August.

According to him, his administration’s non-oil revenue efforts had begun to yield enough to meet this year’s projections by August, thereby reducing Nigeria’s dependence on external loans.

“Today I can stand here before you to brag. Nigeria is not borrowing. We have met our revenue target for the year, and we met it in August,” he stated.

The president also stated his administration had been able to bring the exchange rate under control after the initial turmoil, adding that the naira had appreciated from over N1,900/$ to about N1,450/$, since floating the exchange rate last year.

Interestingly, Dr Okonjo-Iweala seems to share in the president’s excitement about the “enhanced fortune” of the nation’s economy.

After a meeting with President Tinubu, in Abuja, recently, she had remarked that the president should be commended since his reforms had brought stability to the economy.

The WTO boss noted that such stability was necessary before any meaningful growth could be achieved in the economy.

“You cannot improve on the economy unless it is stable. The reforms have been in the right direction. What is needed next is growth; we need to grow the economy; we need to put it in social safety nets so that those who are feeling the pinch of the reforms can also have some support to be able to weather the hardship,” the highly respected economist had argued.

Iweala noted that the economy would only be considered as growing when it begins to create jobs and enhance the lives of the people.

Expectedly, since their pronouncements, these remarks have continued to elicit reactions from stakeholders in the nation’s economy. Interestingly, opinions regarding those remarks have been sharply divided. While some are of the view that the present administration deserves some commendation, going by the state they met the economy two years ago, there are others who are of the opinion that until the average Nigerian begins to feel the impact of the reforms positively, such celebrations should be muted.

Speaking on the issue, the Chief Executive Officer of Wealthgate Advisors, Mr Biyi Adesuyi, believed it would be disingenuous for anybody to begin to describe the economy as being on the right track when the average man on the street still battles with inflation and its after-effects.

Describing the economic woes the nation currently finds itself in as self-inflicted, Adesuyi argued that the hardship Nigerians presently grapple with would have been averted if the reforms had been handled differently.

“While I agree that we have achieved stability in terms of the value of the naira against the dollars, and inflation rate, which used to be close to 40 per cent, the fact, however, remains that this is not where we ought to be.

“The exchange rate was slightly above N400 when this government came in 2023, so stabilising it at over N1,500 today should not be something to celebrate.

“Since floating the naira, and removing the subsidy on petroleum, the income of the average Nigerian has been ravaged by inflation. And, despite the upward review of the minimum wage from about N30,000 to over N70,000, you see that you can’t buy one-third of what that N30,000 could buy then, with this new minimum wage,” he stated.

The Wealthgate Advisors boss noted that while the exchange rate had been scaled down from the over N1,900 it was immediately after the floating of the naira, there is still a lot of work to be done to put the economy on the right track.

He added that until the effects of those policies are beginning to be positively felt by Nigerians, the economy cannot be described as growing.

“Interestingly, what the economy needs now is growth. It has to grow for Nigerians to positively feel it. It has to grow to create jobs,” he added.

The Chief Economist at SPM Professionals, Dr Paul Alaje, also believed it is not yet Uhuru for the economy.

He argued that, with inflation rate at around 33 per cent, and debt profile in the regions of N30 trillion by the time the last administration left office in 2023, it was obvious that the present government met a distressed economy.

“Before Buhari came into office, inflation rate was at 9 per cent. By 2021, it had grown to 18.21 per cent and unemployment rate was single digit, 9.6%. Before Buhari left office, inflation rate was 33 per cent, debt profile had grown from N10 trillion to over N30 trillion, while the exchange rate went from N197 to N400. Besides witnessing two recessions under Buhari, the country’s GDP growth rate was in the negative. So from this, one can see that the present government inherited a terrible economy,” he added.

He, however, cautioned Nigerians on the need to be careful while interpreting what the government said about stabilising the economy. According to him, the president only said his government had met its revenue target for the year in August, but never said it had met its expenditure target or its budget target.

“In that budget, we have revenue, we have debt. The debt expectation is in trillions of naira, so he didn’t make a claim that we have covered it, because if you check, Nigeria is still applying to collect some loans, in spite of the announcement,” he added.

Alaje counselled that since the government had met its revenue target for the year, it should slow down on debt.

“My take is this: since we’ve met our revenue target, we might need to slow down on debt. We are doing over N140 trillion today. It may grow to N200 trillion by 2026 because naira is susceptible to devaluation over the years, since in the 70s till date.

“If you are talking about growth, reflecting inclusion and income distribution, we are not seeing that yet. Statistics out there still shows that urban poor is 75 per cent. What this simply means is that when you put four people together, three of them are living below poverty line, induced by inflation and other factors,” he stated.

Interestingly, Kuteyi Ajayi, a citizen, would not agree less with Alaje’s submissions. For the father of three, who presently works at the lower rung of the ladder at a fast-moving consumer goods (FMCG) company, after losing his lucrative block-making business last year, the state of the nation’s economy has not called for such bragging rights the president seems to be currently brandishing.

Kuteyi stated that he would only share in the president’s excitement when his (Kuteyi’s) personal finance and those of his family members, which took a downward dive immediately after the reforms started, begin to stabilise.

Ajayi, who once ran a thriving cement block company that folded up due to the sudden hike in the prices of cement and building materials, argued that whatever progress the government claimed to have made on the economic front exists only on paper.

“The little amount of money I made while running my business was enough to handle most of my needs, then. Now I earn more here, since the wages have been reviewed, but despite that, that amount can only get me about one-third of the items I was earning then could get me. Until we begin to see the effects of these reforms, positively, it would be foolhardy for us to celebrate,” he stated.

Adesuyi believed Ajayi’s comments captured those of many Nigerians presently living below poverty line. He would want the government to be intentional in ensuring this class of Nigerians is taken out of poverty.

One of the ways, he explained, is to strengthen the naira, since the nation’s present economic woes, he stated, had to do with the declining fortunes of the nation’s currency.

While charging Nigerians on the need to be hopeful, Alaje would, however, want the government to do everything within its power to sustain the ‘little gains’ it had recorded in the area of currency stability.

“One of the ways government can do that is to discourage the use of foreign currency during electioneering period. For instance, it should ensure there is no such exchange of foreign currency either for delegates, or any other politically-exposed persons as the elections in 2027 draw nearer,” he stated.

The renowned economist warned that ignoring such warnings would again put pressure on the dollar, and ‘evaporate’ whatever gains had been made in the area of currency stability. (Sunday Tribune)

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