Special Adviser to President Bola Tinubu on Information and Strategy, Mr Boyo Onanuga, has claimed that his principal’s economic reforms are yielding dividends. However, facts do not support his claim.
“The economic reforms of the PBAT administration are yielding dividends. The road is rough, the times are tough, let us persevere for a brighter future. Surely, there is a beam of light at the end of the tunnel,” he said on his X handle on Tuesday morning.
While Onanuga’s objective could have been to inspire confidence in Nigerians, his claim is not true, as Mr Tinubu’s economic reforms are yet to start yielding dividends.
Facts vs Fiction
First is his petrol subsidy removal policy. On May 29, 2023, President Tinubu said during his inaguration that “petrol subsidy is gone.”
“We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor. Subsidy can no longer justify its ever-increasing costs in the wake of drying resources,” he had said.
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“We shall, instead, re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions,” he had added.
Since the announcement of petrol subsidy removal, petrol price has risen from less than N200 per litre to over N1,000 per litre. Petrol currently sells above N1000 per litre across filling stations in Lagos, Port Harcourt, Enugu, Kano, Abuja and other parts of the nation.
However, the major challenge is that several petrol stations still do not have fuel across Nigeria. In Ejigbo-Ikotun area of Lagos, Economy Post found no fewer than six petrol stations without petrol. Same as Kubwa and Lugbe in the Federal Capital Territory (FCT). Our correspondents who monitored the petrol stations were told that they “are starved of cash to buy petrol.”
Petrol marketers (fuel stations)’s cash had bee tied down by the Nigerian National Petroleum Company (NNPC) who was demanding more money from them after fuel price was raised in September 2024. Some of the marketers had made financial commitments before the petrol price hike but were asked to pay the additional charges by the national oil company.
“Also, some marketers’ funds were tied down by the equalisation funds that they used to get. You know, before the Petroleum Industry Act (PIA), marketers were getting Petroleum Equalisation Fund (PEF), but many of them did not get their before the PIA started. This has tied down their money and hurt their capacities to compete,” a petrol industry expert said.
Right now, marketers can buy directly from Dangote Petroleum Refinery or even import due to the deregulation of the downstream sector, but some of them have no cash to buy, even with the recent settlement between the NNPC amd marketers over price differences, thanks to the intervention by the State Security Service (SSS).
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Petrol price has increased more than five times since May 20, 2023, but availability is still an issue.
“As far as the petrol industry is concerned, Tinubu’s reforms are not yielding dividends yet. They may manifest later, but we are not seeing it yet,” said a lawyer and petrol engineer, Mr Muhammed Aondokaa.
Mr Tinubu’s government is rolling out compressed natural gas vehicles for Nigerians as the nation moves to gas. However, the cost of converting a vehicle to run on CNG in Nigeria is between N1 million and N2 million, and many cannot afford it.
Inflation is a terrible tax to the poor
In September 2024, the headline inflation rate stood at 32.70 percent as against the August 2024 headline inflation rate of 32.15 percent, said the National Bureau of Statistics (NBS).
Food inflation rate in September 2024 was 37.77 percent. On a year-on-year basis, it was 7.13 percentage points higher than the rate recorded in September 2023 (30.64 percent). Right now, prices of cassava, bread, beans, fruits, rice, yam , among other food products, have more than doubled in one year since Mr Tinubu became president.
Yet, the government has failed to provide succour to the poor by way of loans, grants or even food stamps as seen in other nations.
Protests happened across Nigeria in August and October this year, with demonstrators calling for a change in the style of governance.
The August protest was tagged, “#EndBadGovernanceInNigeria,” while the October’s was known as “FearlessInOctober.”
The #FearlessInOctober protest is a continuation of the #EndBadGovernanceInNigeria protest which took place across Nigeria in August.
Nigerians protested against the cost-of-living crisis bedevilling the nation. Protesters said the government had not provided sufficient palliatives for citizens struggling to have two square means in 24 hours due to Mr Tinubu’s twin policies of petrol subsidies and foreign exchange float.
Naira now among worst currency
The World Bank said in an October 2024 report that naira was among the worst currency in Sub Saharan Africa (SSA) in August 2024.
Naira stood at N1,603 to a dollar on Tuesday, October 22, 2024, at the official market as against N775.44/$ on October 22, 2023. The currency has weakened by over 70 percent since Mr Tinubu became president, resulting in galloping inflation in the economy.
“By August 2024, the Ethiopian birr, Nigerian naira, and South Sudanese pound were among the worst performers in the region. The Nigerian naira continued losing value, with a year-to-date depreciation of about 43 per cent as of end-August,” World Bank said in the report.
“Surges in demand for US dollars in the parallel market, driven by financial institutions, money managers, and non-financial end-users, combined with limited dollar inflows and slow foreign exchange disbursements to currency exchange bureaus by the central bank explain the weakening of the naira.”
Onanuga’s claim isn’t true
Analysts believe it is too early to judge President Tinubu. They, however, say that Nigerians have yet to start reaping the dividends of his reforms.
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“Whether it is cost of petrol, naira depreciation, rising food prices or even poor infrastructure across the nation, we are not yet reaping the dividends of Tinubu’s performs. I am not pessimistic as I believe the dividends may come later, but we are suffering at the moment and our salaries do not even last till 15th of the following month,” said an insurance broker, Mr Dipo Oteyola.
Mr Oyetola said the current government was yet to initiate reforms to assuage the sufferings of the Nigerian people.
An economist, Dr Jacob Israel, said there was a need for the current administration to have a holistic plan on social safety nets for Nigerians.
“There should be a plan to help the poor who are at the receiving end of some of the policies. These people cannot send their children to school or visit good hospitals when sick because of poverty. And many more are falling into this class due to the policies of the current administration, but the government has a duty to protest them,” he noted.