The economic reforms introduced by the Tinubu administration under the “Renewed Hope Agenda,” largely influenced by the prescriptions of the IMF and World Bank, have left the majority of Nigerians in dire financial straits. The cost of living has surged dramatically, making it increasingly difficult for households to afford basic necessities, particularly food. This situation stems from the removal of subsidies on petroleum products, which are heavily reliant on imports. Additionally, the floating of the Naira against other currencies has led to its depreciation, further escalating the prices of food items and essential commodities.
Nigeria’s manufacturing sector is shrinking under the weight of increased operational costs, leaving the populace trapped in economic hardship. The cost of locally produced rice has soared to N80,000 per bag, while imported rice costs around N95,000. With the newly approved minimum wage of N70,000, a Nigerian worker cannot even afford a bag of locally manufactured rice, signifying extreme poverty for many Nigerians, especially those earning less in the informal sector.
Unfortunately, the nation’s policymakers seem to have succumbed to the influences of international financial institutions, convinced that enduring hardship today will eventually result in a better tomorrow. However, the reality paints a different picture. If the Structural Adjustment Programme of the mid-1980s, which also focused on subsidy removal, Naira devaluation, privatization of public enterprises, and financial liberalization, failed to deliver on its promises of a prosperous future, one wonders what the current reforms, following the same trajectory, will achieve. It feels like old wine in a new bottle.
Economics, at its core, is a discipline rooted in common sense. It does not endorse perpetual borrowing or reliance on debt as a path to economic growth, nor does it support the notion that import dependency or the export of raw materials will bring prosperity. A sound economy thrives on local production, self-sufficiency, and strategic development.
Local industries in Nigeria, such as refineries, textile mills, and agro-allied businesses, were originally established to capitalize on the country’s resources. The availability of crude oil led to the establishment of refineries, while the textile industry was built around local cotton production. Revitalizing these industries is key to sustainable growth.
For President Bola Ahmed Tinubu to leave a lasting legacy and rescue Nigeria’s economy from impending collapse, decisive actions are needed. Failure to act may result in social unrest, political instability, and a weakened state vulnerable to external threats. Below are some strategies that could lead Nigeria out of its current economic quagmire:1. Privatization of Local Refineries: The government should divest its absolute control over local refineries by listing them on the Nigerian Stock Exchange. Nigerian and foreign investors could purchase up to 60% of the shares, while the NNPC retains 40%. This could later be reduced to 20% as the industry matures, ensuring broader participation while maintaining oversight. No single institutional investor should own more than 20% of the shares. 2. Support for Dangote Refinery: As a key indigenous investment, the Dangote Refinery should receive the necessary support and encouragement to succeed. This will not only create jobs and generate employment but also contribute to Nigeria’s foreign exchange earnings and eliminate importation of refined petroleum products 3. Establishment of an Industrial Resuscitation Fund: This fund would focus on reviving closed and struggling industries, reducing the need for imports by reinstating local production. Additionally, it could incentivize foreign manufacturing companies that have left the country to return. 4. Trade Policy Review: The government should reassess its trade liberalization policies to protect local industries from excessive foreign competition. This would help boost local manufacturing and create jobs for Nigeria’s large unemployed youth population. 5. Reallocation of Cash Transfer Funds: The cash transfer policy, which inadvertently promotes consumption, should be reviewed. These funds should instead be directed towards production-oriented ventures that stimulate economic growth rather than fueling inflation. 6. Reform of Financial Liberalization: The current financial liberalization framework has led to exorbitant interest rates, which stifle the growth of large, medium, and small-scale enterprises. These policies need to be revised to facilitate more affordable borrowing, thus enabling businesses to flourish. 7. Agricultural Support: Policies that promote food security through agricultural investment should be rolled out. Fertilizer production companies, in particular, should be incentivized to boost agricultural output and ensure consistent food supply.
8) The CNG initiatives of Tinubu administration should not be made to becloud the strategic role of the PMS as a major player in the petroleum industry. Consequently the 20% stake of NNPC in Dangote Refinery should not be diverted to the CNG because the latter and spirit of $3 billion facility from Afriexim bank with payment in crude oil supply was to secure the 20% stake in Dangote Refinery. In as much as the CNG provides an alternative not a substitution to the PMS, consumers are the determining factor of which one patronise.
9) The huge capital outlay in the introductory stage of a product life cycle should be allowed to take place with the CNG without compromising the take off stage of Dangote Refinery.
10)The 7% shareholding of NNPCL in Dangote Refinery needs to be looked into with a view to having a seat on the Board. It is therefore, imperative for NNPCL to acquire its initial allotment of 20% to qualify for a seat. This will tenable NNPCL to play a strategic role in its oversight function. It will also guarantee the growth, profitability, sanctity, safety and security of investment in the petroleum sector for the benefit of the nation
The aforementioned measures, if properly implemented, could significantly improve Nigeria’s economic situation. However, infrastructure development remains critical. For any economy to grow and prosper, it requires a stable supply of electricity, efficient transportation networks (including rail and road systems), and access to clean water. Investment in education is equally essential. A well-educated and skilled workforce is more productive and better equipped to drive industrialization—just as we’ve seen in nations like China, India, Brazil, and South Africa.
The Malaysian miracle is rooted in the belief of its leadership in the sanctity of inward looking strategy which saved it the cancerous IMF and World Bank prescription in solving its economic challenges. The approach helped to propel the growth of its economy to become one of the Asian tigers
For Nigeria to reclaim its position as a leading African nation, it must reduce its dependency on Western powers and align itself with emerging economic powers, such as the BRICS nations. Only by embracing such strategies can Nigeria regain its freedom and chart a path toward sustainable economic growth.
Mahmud Shuaibu Ringim
HALIM Consulting Ltd
Kano
mahmudshuaibu44@gmail.com
