Within two weeks of assuming office as President of the Federal Republic of Nigeria, Bola Tinubu has made more moves than a gymnast doing the quadruple twist. He has enacted major policy initiatives, suspended some senior officials of government, and directed spectacular arrests of others.
His inaugural address was no ordinary salutation to the citizenry. He came out, guns blazing. By the time he was done introducing himself to Nigerians as their new C-in-C, he had outlined four major market shifting policy moves - harmonizing the foreign exchange markets, allowing a dual currency regime for the Naira, affirmed that his government planned to follow through on the removal of fuel subsidies and made a commitment to foreign investors that they would be able to repatriate their earnings in Nigeria.
The stock, bond and money markets moved positively in response, indicating that the risk discounting that those markets had factored in, to account for the bipolar policies of the past government was easing. Investors – local and foreign - and corporate entities had much to cheer on in the new President’s speech. Nigeria, it seemed was back on a path to clarity and consistency in its investment, monetary and fiscal policy.
The joy did not extend to all markets though. The mass markets – those streets, alley ways, home fronts, taxi parks and community squares where the teeming mass of Nigerians ply their trades and conduct their business exploded with uncertainty and chaos. Prices of petroleum products exploded, and secondary inflationary shock waves rifled rapidly through the rest of the economy.
While Nigerians were still recovering from the motion sickness caused by these moves, Mr. Tinubu has followed with even more policy initiatives - signing into law the enhanced deregulation of the energy sector, the harmonization of the retirement age for judicial officers, new data protection laws and a revived student loan program.
Between signing bills, Mr. Tinubu made time to authorize the suspension of Godwin Emefiele the CBN governor and Rasheed Baw, the EFCC Chairman. If the criticism of the Buhari regime was that it suffered from a crippling and debilitating slowness to act with urgency and purpose, Tinubu has demonstrated the opposite tendency - a readiness and willingness to act. It took Buhari over 6 months to name a cabinet and address any of the myriad problems he met when he took office. Buhari’s slow moving coach endured till the very end – given that the four bills that Tinubu signed into law had all passed under his watch. Mr. Buhari was not even bothered to sign into law, bills that passed through the national assembly in his time as President and rightfully claim credit for them.
While Buhari was a hands-off president with little concern for details, Mr. Tinubu has shown himself to be as interested in detail as a museum curator. The two contrasting ways they approached the election of national assembly officers are a case in point. While Mr. Buhari was content to watch a Shakespearean drama play out in the election of leaders to the legislature in 2015, that ended with Bola Saraki’s ascendancy to the position of Senate President, Mr. Tinubu did not just watch the script, he helped write it. His fingerprints were all over the “crime scene.” Tinubu would not allow himself to be outmaneuvered by Abdulaziz Yari, the way Buhari was, by Saraki. In Akpabio, Tinubu has the Senate President that he wanted. Nigerians will come to see more of Tinubu’s stye of total control in the coming months. They can ask Lagosians what that feels and looks like.
Although the results of Mr. Tinubu’s early moves are yet to be seen, the declarations of victory have already started in some quarters. For a people that have been constrained by decades of slow-moving governance and callous indifference to national issues, the fast pace with which the Tinubu government has set about its work is a welcome change. Skits are being made about Tinubu’s fast pace. A trending video has turned his actions into a rhythmic chant with the refrain of “Gone, Gone, Gone.”
However, through the dust cloud of galloping horses and the dizzying euphoria, we must peer through the haze and begin to ask some questions: are Mr. Tinubu’s actions well thought through strategic moves or is he shooting from the hip? Is the appearance of action the end game or is there a well-articulated plan that will drive the policy announcements he has made towards clear results?
While it is too soon to call the results of the game, some of Mr. Tinubu’s actions are a cause for concern.
Announcing fuel subsidy removal without planning to contain the fallout.
Let us get something clear - Nigerians appear unanimous in their view that fuel subsidies have been an avenue for crass and massive corruption. Every major candidate vowed its reform. While on paper, the idea that the Nigerian masses should benefit from a resource that they have been abundantly blessed with makes sense, successive governments have failed to make it work effectively.
The corruption was pervasive - from making fake claims about volumes sold, to diversion of supplies to neighboring African nations - a handful of oil marketers and their collaborators in the civil service, the political class, law enforcement and border control have robbed Nigeria blind. They have been the major beneficiaries of the fuel subsidy program. But even the crumbs that fell off the table and eventually reached the masses had some effect – they kept prices low for kerosene and petrol products, allowing mothers to cook, and enabling traders, small businesses, and low-income households to power their small petrol generators. The large army of unemployed Nigerians plying their trade as Uber drivers, kabu-kabu riders and Okada pilots made their living off the low petroleum product prices that the subsidies enabled.
Mr. Tinubu is a seasoned Nigerian political actor. He more than anyone else should have understood that his declarations about fuel subsidies would lead to chaos, hoarding and panic buying. Those responses have followed announcements of subsidy regime reform every single time such announcements have been made. Tinubu clearly had not engaged with key stakeholders ahead of his inaugural speech. Workers and the labor unions were caught flat footed. The marketers began hoarding as they had always done – clearly no one had told them that their usual shenanigans would not be tolerated this time. There were no government officials on hand to clarify to the Nigerian people that subsidies are paid for in the budget only through the end of June, or that people should anticipate an increase in prices. No calculations were done about what the economic impact would be, by how much inflation would rise, or what increases in the minimum wage would be considered for Nigerian workers hit hardest by the end to subsidies. All of these are basic things that ought to have been done, before making such a profound announcement.
Given that Mr. Tinubu is an erstwhile meticulous planner, the announcement of subsidy removal in an inaugural speech without preparation for the fall out seems to have been shooting from the hips. There was nothing strategic about it. Nigerians knew it had only month to go. There was nothing in the budget for it beyond June. The Buhari government has made a big show of “borrowing” for $800 million in palliatives to cushion the effects of subsidy removal for the neediest households and persons. And about those palliatives, like Hadi Sariki’s fictitious Air Nigeria project, they have somehow failed to materialize in the bank accounts of needy Nigerians, as was promised.
Although Mr. Tinubu has staved off the mass action that the labor unions threated, he must move urgently to address the legitimate needs that a large swathe of Nigerians have for some sort of social safety net to buffer their economic woes. Two hundred million Nigerians cannot and should not be made to suffer the consequences of decades long abuse of the subsidy program by marketers, politicians, and their cronies, thieving civil servants and compromised law enforcement and border control officers. We are throwing the baby out with the bath water. There were clearly some benefits that the fuel subsidy program provided to ordinary Nigerians. If there were no benefits then we should not be seeing an increase in the prices of goods. Nor should we be seeing governors of various states announcing 3-day work weeks because civil servants cannot afford to go to work due to high transportation prices.
In 2012, Mr. Tinubu was one of the leading opponents to the removal of fuel subsidies by then President Goodluck Jonathan, declaring at the time that “Jonathan has betrayed the people.” In the ensuring decade since that declaration was made, Nigeria’s economy has worsened, its unemployment rate has grown and if there was ever a time that people needed support from some sort of social welfare program, it is now.
The former subsidy regime was too broad and clearly open to abuse and corruption. A more targeted and enduring needs-based subsidy program is needed. One that targets the most vulnerable Nigerians and the most impacted economic sectors (e.g., public transportation, small businesses) and provides them with targeted benefits.
Without a doubt, workers’ wages should go up. Whatever the government does on the civil service side will clearly spill over to inflationary wage pressures on the larger private sector side. The government might want to offset this expected increase in the private sector wage burden by providing wage write offs in tax bills. Some of Mr. Tinubu’s loudest praise singers have suggested that the fact that Nigerians have not taken to the streets in protest at the higher prices of petroleum products is evidence that they have “resigned themselves” to the fact of the permanent and determined removal of subsidies. A more apt assessment should be that Mr. Tinubu is enjoying good will from the Nigerian people. They are sizing him up, assessing what type of leader he will be. They are hopeful that his past declarations of support for the masses was not just “opposition speak” but a sentiment that stems from a deep-seated belief that the progress of the nation is not judged by how well those who already have are doing, but by the fortunes of the middle class and less privileged households.
Mr. Tinubu was also pragmatic to engage the labor unions after they threatened mass action. For all our sakes, he needs to return to the unions with a substantive package of social welfare reforms that will benefit people, not proxies.
Student loans: The coming attack on funding on Public Universities
Shortly after Mr. Tinubu signed the student loan act into law, the permanent secretary of the Federal Ministry of Education announced in a media briefing that the government can no longer afford to bear the financial burden of universities in the country.
According to the permanent secretary, ‘whether we like it or not, the government can no longer foot the bill for universities.” Nigeria’s total education budget for 2023 is N1.07 Trillion or about N,5350 per capita. This is a mere 0.4% of GDP based on $450 billion dollars GDP at an assumed exchange rate of N600 per $. In contrast Ghana’s education budget is 3.1% of GDP, while South Africa’s is 6.6% of GDP. Little wonder Nigerians with means are flocking in droves to schools in Ghana, South Africa, and other parts of Africa and beyond, whose governments are making the appropriate investments in the education sector.
For perspective, the national assembly comprised of 469 officials has a budget of N228.1 billion – about one fifth the size of the national education budget. That is a projected per capita spending of N486 million per elected official!
If there is a metric that demonstrates how little regard Nigerian governments have for the future of our young people, it is what we commit to their education. The Tinubu government has no moral authority to say we cannot afford to continue supporting our public schools when we do not even yet spend enough on them. Now they are proposing public private partnerships as a panacea for the low funding issue. In what part of Nigeria’s economy has public private partnership been successful? Are we about to embark on some grand experiment with the future of our children? Government funding of education subsidizes the payment of instructors and supports research. The private sector seeks to make profits on their endeavors, and in education, they do so by raising fees.
This planned defunding of the education sector puts into proper perspective the fanfare that was raised around the new students’ loan scheme and the recent invitation of the leaders of NANs and other student groups to Aso Rock to meet with Mr. Tinubu. In the logic of the new government, why complain about high tuition fees, if you can get access to loans to cover the cost?
So, while the parents are reeling from subsidy removal, the children will be borrowing loans against their future. The callousness of this proposed path of action is galling. Politicians who benefited from the high quality free or highly subsidized public education once available in Nigeria, are now taking away those same benefits from the children of the poor. They are removing funding from public schools in Nigeria, while their own children are attending posh universities overseas.
Advice for labor and student activists
In Mr. Tinubu Nigeria’s activists have met their match. Mr. Tinubu understands the importance of leadership to popular politician action. He knows that while Nigerians might feel frustrated and swamped under the deluge of prohibitive costs and low wages, they will remain in their homes complaining, unless they are mobilized into action. As a member of NADECO in the1990s and a member of the opposition for all but 8 years since 1999, Mr. Tinubu has worked closely with the labor and students’ movements for decades and understands how they function. It is instructive that Mr. Tinubu is the first president to have personally met with the leaders of all the major labor and students’ unions (TUC, NLC, NANS, etc.) within his first two weeks in office.
Now that these leaders have received a presidential handshake they have been incapacitated, if not completely neutralized. Mr. Tinubu should remember that Nigerians did not need unions to organize the End Sars protests in 2020.
A new type of social movement is emerging in Nigeria - one that is not bound to traditional notions of cause driven activism (e.g., labor, education, etc.) but driven by, and formed around societal issues – just like End Sars, which was driven by the issue of police brutality. The 2012 fuel subsidy removal protests which incidentally then opposition politician Tinubu supported was organized primarily by a coalition of civil society organizations.
Such loose, less centralized, issues-based movements are the best way to neutralize the paralyzing effects of dealing with wheeler dealer presidents like Mr. Tinubu. A word of caution to Mr. Tinubu and his praise singers: quiet streets do not always mean people are happy. Graveyards are quiet and there’s very little joy to be found there. There is pain in the land. A lot of economic pain.
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Dr Malcolm Fabiyi.