By, Tosin Adetola 

It’s been four months since Bola Tinubu emerged as the winner of the 2023 presidential election. After a controversial electoral process. Tinubu inherited a frail economy from his predecessor, Muhammad Buhari, who grossly mismanaged the economy in the last 8yrs.

 There was no time in Buhari’s lackluster tenure in office that the GDP-revenue ratio grew. The debt-GDP ratio was nothing to write home about. The administration incurred debts to fund infrastructure projects, pegged the naira, and subsidized fuel consumption to keep the economy afloat. To cut Buhari some slack, the price of oil was low almost throughout his 8 yrs in office.

The health of a commodity-led economy like Nigeria, is contingent on commodity prices on the global market. The period Nigerians witnessed striking economic growth, in terms of GDP per capita- albeit, without meaningful improvement in standard of living- was during the 70s oil boom and the Africa Rising era of the early 2000s. 

Due to geopolitical tensions in the middle-east– between the US-backed Israel’s apartheid state and the oil producing Arab countries– OPEC states imposed an oil embargo on the US for backing the zionist state. The global price of oil skyrocketed as a result of this friction. Oil producing, developing economies like Nigeria experienced an unprecedented economic boom, as post-war Europe incidentally needed commodities to reconstruct the economy.

The Nigerian military regimes and politicians embezzled and squandered the proceeds of the oil windfall across the 70s, plunging the country into a debt crisis in the 80s. This ushered in, the era of IMF structural adjustment programs, which precipitated the rapid de-industrialization, and under-development of the Nigerian state.

Fast-forward to the early 2000s, the country experienced economic boom. Thanks to the unprecedented economic rise of China as the factory of the world, coupled with the inflow of investments, and a spike in price of commodities in the global market.

Nigeria’s GDP per capita peaked, at its highest ever, in 2014, at $3,000. This growth didn’t translate into improvement in the human development index (HDI), it had no significant effect on the awful poverty rate, and inequality gap for Nigerians. But by mainstream, economic metrics, the country was assessed to be on a growth trajectory. This was during Goodluck Jonathan’s tenure. 

Toward the end of Buhari’s tenure in office, the price of oil surged, again, to a record high, due to the Russian-Ukraine war. But the Nigerian economy was already struggling due to covid, as well as global inflationary pressures on top of oil production challenges. All the refineries were reported to be moribund; there was no single functioning refinery owned by the state to ramp up production to meet OPEC’s quota.

Consequently, the country missed out on the windfall of oil revenue in 2022. By the time Tinubu would take the wheel, as the new driver of the economy. The Nigerian state was already on the verge of fiscal insolvency. The debt profile was eerily appalling, as the country serviced its debts with over 90% of its revenue. Debts were incurred to prop up the subsidy regime and “defend the naira ”. Tinubu inherited an unproductive economy in a profound, structural crisis. 

The IMF already demanded fiscal and monetary reforms. In other words: an urgent enactment of austerity measures ostensibly to reset the economy. What this implies is ripping off the band-aid, inflicting painful changes for the citizenry, with promises that this would help solve the economic crisis. Mr. Tinubu, who objectively lacks the expertise for radical reforms, has seemingly unquestioningly adopted IMF’s proposed policies.

In the last four months, the fuel subsidy regime has been dissolved, which stoked the collapse of the informal sector of the economy, that makes up the largest pie of Nigeria’s economy. The removal of the fuel subsidy has had multi-faceted effects. It has added to the global inflationary cost of living crisis– food and transportation inflation, shut down of small-to-medium enterprises (SMEs), etc.

The devaluation of the naira trailed it. In the absence of an export-led strategy, or manufacturing base to rationalize it, the new monetary policy merely facilitated the floating of the Naira. As I write this, $1 is the equivalent of N1,200. The currency is on a free fall into the abyss of nothingness.

To cap it all, the Tinubu administration resolved to price Nigerian university students out of tertiary education. An essential part of his neoliberal reforms. The government has washed its hands off funding of tertiary education, by giving university administrators the “autonomy” to source for the funds needed to run federal unis.

The administrators have seen this as a carte blanche to adopt a cost-reflective approach, to keep the lights on across campuses. They have shifted the responsibility of the government on the students, hiking tuition fees, 600% above the minimum wage. This effectively reduces tertiary education to the exclusive preserve of the rich. By all indications, it’s a government that has signed a pact with economic stagnation and under-development. 

A country renowned as the poverty HQ of the world, that’s also simultaneously making tertiary education inaccessible to its teeming poor population, is not serious about economic growth and industrialization. The results of the reforms is to make poor Nigerians pay for decades of elite mismanagement of the economy.

President Tinubu’s neoliberal reforms of the economy have merely added more Nigerians to the lengthening queue of 133 million Nigerians already living in stark poverty before. The neo-liberal policies will ensure the economy continues its plunge in the wrong direction, with no prospect of growth in the short or long term.

Nigeria needs a paradigm shift away from IMF’s policies of under-development, that traps developing economies like Nigeria into a cycle of debt, foreign multinational corporate exploitation and wage slavery!