100 Days: Lack of clear roadmap made Tinubu’s economic policies hit Nigerians hard — Owoeye

Professor of Development Economics at Ekiti State University (EKSU), Ado-Ekiti, Professor Taiwo Owoeye, examines the economic performance of President Bola Tinubu in the last 100 days. IMOLEAYO OYEDEYI brings the extract.

As an economist, how would you rate the administration of President Bola Tinubu over the last 100 days?

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I think he did pretty well. The government might not have been able to achieve a high rating; I'll give it between 50 and 60 percent. Indeed, the two flagship policies: the removal of subsidies and the deregulation of the exchange rate are the right policies. The removal of subsidies is very important because we borrowed money to pay for the fraudulent subsidy. So we need to put a stop to this, so we can keep the money for other purposes. Deregulation of the exchange rate is also important because the gap between the black market and the official rate is very high. Although it is also becoming very large today, it was very high then and we must find all means to put an end to it. But more importantly, we must also ensure that people benefit from the disparities between official and black market rates. More importantly, we also need to increase government revenue, which has increased since the removal of subsidies. These are the benefits of policies.

But on the other hand, these policies have increased the cost of living. The inflation rate and the cost of transportation have been very high recently. But I think that is the price we had to pay for the reforms. Above all, I still have the impression that the government has not done what it was supposed to do to reduce the negative effects of these policies. By now, the government should have concluded negotiations on salary increases with the unions.

Second, the palliative that the government is trying to propose is banal. He didn't handle the problem the right way. In my opinion, the government does not seem to have a clear policy direction on how to deal with the negative effects of these two policies. But these two policies are good initiatives. It is simply worrying that the government has not been able to find ways to reduce the negative effects of these reforms on the population, who have been the target of the harsh economic realities linked to both reforms.

The thing is, when you want to make a policy like that, you also have to look at its negative effects and how you can help people. When initiating such policies, the government must have an effective roadmap that will reduce the negative effects of these policies. But obviously he had no road map before embarking on economic reforms, which had a negative impact on the population.

But going forward, what do you think the current administration can do, especially given the difficulties the two reforms are causing Nigerians?

The first thing the government must do is come up with a clear roadmap on how it can negotiate the minimum wage increase with the unions. Secondly, the government should design the right palliatives and the necessary channels to deliver them directly to the people. The government should come up with policies that will help the common man on the street. These policies could take the form of improving the flow and condition of our public transport system and interventions in favor of small industries, so that people can access cheaper credit to run their businesses, among others. Enough of the cosmetic approach, the government needs to sit down and do something that will have a direct positive effect on people's lives.

Right now, the exchange rate is creating a real problem. The fact is that the moment you deregulate the exchange rate, the value of the Naira will start to depreciate and that of foreign currencies will start to appreciate, both on the black market and at the official rate. If you look at it now, you will see that the gap between the two becomes very large. It is therefore necessary for the government to find ways to increase our oil production so that the NNPC can generate more foreign exchange to support the Naira.

The real reason why the naira continues to fall is the illiquidity of the foreign exchange market. The government must therefore address this problem and ensure that the market has a significant supply of foreign exchange. Illiquidity simply means scarcity in forex, which means that the supply of forex does not meet the demand and that is why the naira has fallen. This is mainly because the NNPC has not generated enough foreign exchange as it used to generate…