Despite the government’s Renewed Hope Mantra, President Bola Ahmed Tinubu’s initiatives may not have been able to alleviate the nation’s deepening economic misery in the first half of 2024.
This was revealed by economists and financial specialists in separate interviews.
Giving Nigerians optimism has not been easy for President Tinubu, a former governor of Lagos State who marked his first anniversary in office on May 29, 2024.
This development follows the Federal Executive Council’s recent approval of the distribution of N555 billion to 100,000 families, with a three-month payment of N50,000.
Remember that the “Conditional Cash Transfer” was also approved by the President in October 2023, with Betta Edu, the now-suspended Minister of Humanitarian Affairs and Poverty Alleviation, serving as the beneficiary.
President Bola Tinubu introduced the program, which is part of the $800 million financial support from the World Bank, on October 17, 2023.
Additionally, to support domestic manufacture of vital healthcare items, the federal government recently granted zero tariffs, excise duties, and Value Added Tax on specialty machinery, equipment, and pharmaceutical raw materials as part of the fiscal package.
Additional fiscal measures include a $3.3 billion prepayment facility from Afreximbank guaranteed by crude oil, $2.5 billion in loans from the World Bank to support Nigeria’s foreign exchange supply, and initiatives to raise taxes spearheaded by the Presidential Tax and Fiscal Policy Committee.
Nigerians have lamented the effects of headline and food inflation, which increased to 33.95 percent and 40.66 percent in May 2024, respectively, despite the interventions.
The inference is that, given the rising misery index, Nigerians’ purchasing power has decreased.
Worse, by the end of March 2024, Nigeria’s debt load had increased to N121.67 trillion.
During the first quarter of 2024, the nation spent $1.12 billion on paying off its foreign debt, despite earning N3.94 trillion in revenue during that same period.
This comes after the Central Bank of Nigeria announced various policies, the most recent of which was the termination of the Price Verification System Portal for importers, causing the Naira to drop to N1508.99 per dollar at the official market on Monday.
Gbolade Idakolo, a financial specialist and the CEO of SD & D Capital Management, claimed that Tinubu’s initiatives during the relevant time period had no effect on easing Nigerians’ suffering.
He claimed that Nigerians had not yet experienced the benefits of federal and state welfare programs.
“The criteria being utilized to determine who is qualified for those grants for a three-month period is my main issue with these measures.
“It has been observed that the intended recipients of these federal and state government assistance programs do not receive them, and the ultimate goal is never achieved.
Additionally, I think that this approach would not address the struggles that the extremely poor residents whom these laws are intended to help confront as a result of persistently high food inflation and rapidly rising living expenses.
“The difficulty brought on by Tinubu’s monetary policies has not been lessened by the government’s budgetary measures during the first half of the year. This is what put the nation in its current intolerable predicament,” he said.
The director of the Center for the Promotion of Private Enterprise, or CPPE, Muda Yusuf, countered that while the government has implemented several measures, more work has to be done to have an influence on Nigerians as a whole.
He called on the government to increase its financial interventions in the mining, construction, iron and steel, and allied industries.
The level of fiscal policy affords the government a great deal of flexibility. It is preferable to assist farmers directly rather than via state governments when providing them with direct help. Thinking about that, I believe there ought to be an effect on food production. It is my hope that the state government will sincerely commit to this.
“The supply side may benefit from the measure. I am aware that plans exist to implement measures akin to those in the actual sector.
Rather than monetary policy, fiscal policy actions are the responsibility of the real sector. He asserted that fiscal policies have greater power to stimulate output.
The latest N555 billion cash release approval, according to Prof. Godwin Oyedokun, a don at Lead City University in Ibadan, is an important fiscal action meant to alleviate the hardship that many Nigerians face as a result of inflation.
Oyedokun clarified, however, that if steps aren’t taken to boost supply and stabilize prices, a significant infusion of cash into the economy may make inflationary pressures worse.
“President Tinubu’s fiscal initiatives, including as the N555 billion cash transfer program, show a proactive attitude to resolving Nigerians’ urgent economic difficulties.
But in order to control inflation and provide general economic stability, these policies must work in tandem with monetary policy.
“A comprehensive strategy that combines immediate assistance with long-term economic changes is necessary to address the fundamental problems causing hardship brought on by inflation and achieve sustainable growth,” he stated.