On October 2, President Bola Ahmed Tinubu left Nigeria for a working vacation, returning on Saturday, October 19, 2024. According to Bayo Onanuga, the President’s Special Adviser on Information and Strategy, this getaway served as a much-needed retreat for the President to reflect on his administration’s economic reforms. These policies have faced considerable backlash, with many Nigerians expressing concern over the hardships they’ve caused and calling for reversals of specific measures.
Now that the President is back, what changes can we expect? President Tinubu, alongside the Federal Executive Council, has restructured the federal ministries, dissolving the Ministry of Niger Delta and the Ministry of Sports. Additionally, the Ministry of Tourism has been merged with the Ministry of Culture and Creative Economy. This reshuffling aligns with the President’s broader strategy aimed at improving governance. However, for this restructuring to be effective, challenges such as workload, funding, bureaucratic hurdles, and communication of deliverables—along with factors beyond the ministers’ control—must be adequately addressed.
While it is unlikely Mr. President will reinstate the fuel subsidy, there is a pressing need for an inquiry into the pricing of Premium Motor Spirit (PMS) to safeguard against exploitation of Nigerian consumers. Recent weeks have seen a continuous rise in PMS prices, and beyond linking it to crude oil costs in the global market, clarity on how PMS pricing is determined is essential. It’s crucial to recognize that various petroleum products, not limited to PMS, are derived from crude oil during the refining process, which should factor into pricing decisions.
The Naira has also experienced significant volatility, briefly plunging below N1,700 to the dollar. Typically, with increasing crude oil prices—Nigeria’s primary source of foreign exchange—one would anticipate a more stable Naira. However, September 2024 saw a downturn in Nigeria’s oil production, potentially contributing to the Naira’s depreciation. The government must identify and tackle all the underlying issues affecting its value.
Moreover, Nigeria’s headline inflation rate has become alarming, reaching 32.7% year-over-year in September after two consecutive months of decline. This inflation surge can be attributed to rising transportation costs due to PMS price hikes, the weaker Naira, and flooding that devastated agricultural lands. In responding to inflation, the government should look beyond simply raising the Monetary Policy Rate. The World Bank has suggested lifting restrictions on food and fertilizer imports, a move worth considering since food prices are major inflation drivers in Nigeria.
As President Tinubu resumes his duties following his working vacation, citizens are keenly awaiting his plans to tackle the escalating PMS prices, the Naira’s instability, and the soaring inflation. There are also expectations for a long-anticipated cabinet reshuffle. Despite the outcry over the current economic policies leading to widespread hardship, during the 30th Nigerian Economic Summit (#NES30) held in Abuja on October 14, 2024, World Bank Vice President Indermit Gill stated that sustaining Nigeria’s current reforms for the next 10-15 years is critical to transforming the economy and fostering growth in sub-Saharan Africa. The nation remains hopeful as we wait to see President Tinubu’s next steps.
