The 2023 presidential candidate of the People’s Democratic Party, Atiku Abubakar, on Tuesday, said President Bola Tinubu’s policies did not create prosperity but have rather pauperised the poor and bankrupted the rich.
He, however, highlighted six steps for President Tinubu to take to make a success of the office he occupies.
The president, who assumed office on May 29, 2023, with a Renewed Hope agenda for Nigeria, marks his first year in office Wednesday (today).
In a statement on Tuesday, Atiku reviewed the administration over the past year, criticising the All Progressives Congress-led government for not presenting any plans for economic remodelling, but instead implementing a mix of policies to address it.
Atiku, it will be recalled, at various times had criticised the policies of the administration and, in response, was blamed by the presidency for finding faults without proffering relatable solutions.
On Tuesday, however, the former vice president asked the president to pause and reflect; undertake a comprehensive review of the 2024 budget within the new reform framework; undertake a comprehensive review of the Social Investment Programme to mitigate some of the impact of these policies on the most vulnerable households and refrain from any attempt to further pauperise the poor by introducing new taxes or increasing tax rates.
He also asked President Tinubu to provide clarity on the fuel subsidy regime, including the fiscal commitments and benefits from the fuel subsidy reform and the impact on the Federation Accounts and finally to tackle security headlong.
The former vice president stated that, predictably, 12 months later, Tinubu’s promises of economic growth and alleviating misery remained unfulfilled.
“Tinubu laid out no plans for the remodelling of the economy but soon embarked on a cocktail of policies to achieve it.
“In May 2023, he eliminated PMS subsidies, and a month later, the CBN implemented a new foreign exchange policy that unified the multiple official FX windows into a single official market.
“More policies followed in rapid succession: the tightening of monetary policy to reduce Naira liquidity, a hike in monetary policy rates, the introduction of cost-reflective electricity tariff, and a cybersecurity tax.
“Predictably, 12 months on, Tinubu’s pledge of growing the economy and ending misery remains unfulfilled. His actions or inactions have significantly worsened Nigeria’s macroeconomic stability.” He said.
He lamented that Nigeria remained a struggling economy and more fragile now than it was a year ago.
“Nigeria remains a struggling economy and is more fragile today than it was a year ago. Indeed, all the economic ills – joblessness, poverty, and misery – which defined the Buhari-led administration have only exacerbated.
“Africa’s leading economy has slipped to the fourth position, lagging behind Algeria, Egypt, and South Africa.“Citizens’ hopes have been dashed and not renewed, contrary to the propaganda of the administration, as Nigeria’s economic woes have multiplied,” he added.
Atiku stated that he had previously voiced concerns about the risks of initiating reforms without proper sequencing, without clear implementation strategies, and without considering their potential and actual devastating consequences.
The PDP 2023 presidential candidate said implementing policies without proper planning and a clear destination was nothing other than trial-and-error economics.
“First, President Tinubu’s policies do not create prosperity. Instead, they pauperise the poor and bankrupt the rich. They spare no one. Nigerian citizens, the majority of whom are poor, are going through the worst cost-of-living crisis since the infamous structural adjustment programme of the 1980s.
“The annual inflation rate at 33.69 per cent is the highest in nearly three decades. Food prices are unbearably higher than what ordinary citizens can afford, as food inflation soared to 40.53 per cent in April, the highest in more than 15 years.
“Nigerian citizens have to pay 114 per cent more for a bag of rice, 107 per cent more for a bag of flour, and 150 per cent more in transport fares relative to May 2023.
“Today, in some locations, motorists are paying 305 per cent more for a litre of fuel. Yet, on a minimum wage of the equivalent of $23 per month, Nigerian workers are among the lowest wage earners in the world,” he stated.
He said the courage of the president to remove subsidy on PMS did not translate to the compassion to raise the minimum wage.
“Tinubu had the ‘courage’ to remove subsidy on PMS and impose additional taxes on his people but lacks the compassion to raise the minimum wage or implement a social investment programme that would reduce the levels of vulnerability, and deprivation of workers and their families,” he lamented.
Atiku asserted that President Tinubu’s policies had created a hostile environment for businesses of all sizes.
He added that the private sector was overwhelmed by the poor policies and burdened by his failure to address their negative consequences.
“The manufacturing sector, which holds the key to higher incomes, jobs, and economic growth, has been bogged down by rising input prices, higher energy and borrowing costs, and exchange rate complexities.
“For example, since 2023, the average price of diesel has doubled to N1,600 per litre. Electricity tariff has recently been increased by 250 per cent from N68/Kwh to N206/Kwh.
“As reported by the Guardian (13 May 2024), in Q1 of 2024, energy prices were up by 70 per cent, costing manufacturers N290 billion.
“Since May 2023, corporate Nigeria has lost more than a dozen enterprises to other countries. Unilever, GlaxoSmithKline (GSK), Procter & Gamble (P&G), Sanofi-Aventi Nigeria, Bolt Food, and Equinor, among others, had exited Nigeria, citing reasons including foreign exchange complexities, security concerns, and high operational costs.
“According to the Nigeria Employers’ Consultative Association (NECA), nearly 20,000 jobs may have been lost due to the departure of 15 multinational companies from Nigeria,” Atiku said.
The former vice president warned that an economy with high unemployment rates and a declining manufacturing sector was not viable.
He further noted that President Tinubu’s foreign exchange policies had failed to positively affect Nigeria’s foreign trade balance, contrary to expectations.
“In particular, the free float and the resulting devaluation of the Naira has not resulted in an appreciable improvement in Nigeria’s trade balance. Devaluation has not enhanced the competitiveness of local producers and has had no positive impact on exports of goods, primary or manufactured.
“President Tinubu’s policies have failed to attract foreign investments into the country despite all the posturing and media hype by the president’s men. Exchange rate unification and free float of the Naira have not led to higher capital inflows (whether Foreign Direct Investment or Foreign Portfolio Investments), again, contrary to policy expectations,” the former vice president said.
Atiku then expressed dismay that despite employing various monetary policy measures, inflationary pressures and exchange rate fluctuations persisted.
He attributed the Naira’s sharp decline against the dollar, resulting in its status as the worst-performing currency globally, to Tinubu’s misguided policies.
He noted that President Tinubu’s policies revealed an overestimation of their effectiveness and a lack of readiness for potential consequences.
Atiku pointed out that Tinubu and his team seemed unsure about the current state and next steps of the reform process, as he urged the government to grasp the necessary reforms and their sequence, stressing the need for a framework outlining reform objectives and strategies.
Atiku, therefore, advocated for a comprehensive review of the 2024 budget within the new reform framework.
“The 2024 FGN Budget, the exact size of which remains a mystery, is not designed to address the structural defects of the Nigerian economy or the cost-of-living crisis. It will neither create prosperity nor promote opportunities for our young people to lead a productive life.”
He stated, “The review must prioritise fiscal measures to deal with an unprecedented rise in commodity prices. Higher commodity prices have created more misery for the poor in our towns and villages and have pushed millions of people below the poverty line. One such measure for immediate implementation will be to ease the existing restrictions on selected food imports.
“Third, undertake a comprehensive review of the Social Investment Programme (SIP) to mitigate some of the impact of these policies on the most vulnerable households. The SIP must go beyond Conditional Cash Transfers to include programmes that prioritise support to MSEs across all the economic sectors, as they offer the greatest opportunities for achieving inclusive growth.
“In addition, a holistic programme to support medium and large-scale enterprises to navigate the stormy seas in the aftermath of the withdrawal of subsidy on PMS is also needed,” he said.
He warned against any plan to introduce additional taxes or increase tax rates by the administration.
“We are aware of the behind-the-scenes attempts to increase VAT rate from 7.5 per cent to 10 per cent, re-introduce excise on telecommunication, and increase excise rates on a range of goods.
“It needs to be restated that we cannot tax our way out of this situation. Instead, Tinubu must see the need for expenditure rationalisation and restraint – by having the budget more in sync with Nigeria’s fiscal reality, by improving efficiency in revenue utilisation, improving procurement processes and trimming the size of government – and, therefore, reducing the cost of governance.”
Atiku, who urged President Tinubu to promptly address insecurity, highlighted that the widespread insecurity significantly hampered agricultural production and its contribution to the economy, particularly in the northern region of the country.
“The state of pervasive insecurity continues to adversely impact agricultural production and the value it brings to the economy, especially in the northern parts of the country.
“Insecurity resulting from terrorism, banditry, kidnapping, and cattle rustling has compelled many crop farmers and pastoralists to abandon their lands and relocate to the neighbouring countries of Niger, Chad, and Cameroun.
“This has drastically caused a reduction in the production of food and skyrocketed prices of foodstuffs. Food scarcity in Nigeria is so dire that a report by Cadre Harmonize warns that between June and August this year, about 31.5 million Nigerians may face severe food shortages and scarcity,” he said.
