By Rekpene Bassey
In the intricate web of Nigeria’s economic challenges, a delicate balance between market forces and governmental policies has brought the nation to a critical juncture. The genesis of this predicament can be traced back to two pivotal declarations made during President Ahmed Bola Tinubu’s inaugural speech in 2023, setting off a chain reaction that reshaped the nation’s economic landscape.
President Tinubu, in an impromptu address on May 29, 2023, boldly announced the termination of the fuel subsidy and hinted at an imminent review of the Naira-to-US Dollar exchange rate. The aftermath unfolded rapidly, with the pump price of Premium Motor Spirit (PMS) soaring from N210 to an unprecedented N600.
This was accompanied by the sudden suspension of Godwin Emefiele, the then Governor of the Central Bank of Nigeria, who was promptly replaced by Folashodun Shonubi in an acting capacity.
Shonubi wasted no time in signalling a substantial shift by unifying all segments of the foreign exchange (FX) market, dismantling the Central Bank’s control over forex in compliance with presidential directives.
This departure from conventional practices prompts a critical examination of the wisdom behind allowing market forces to determine a nation’s currency value, particularly when most countries strategically manipulate their currencies to sustain relevance, strength, and high demand.
Even before these economic disruptions, Nigeria grappled with a multitude of challenges—unemployment, soaring inflation, high living costs, poverty, and pervasive security issues—during the tenure of former President Muhammad Buhari.
The unification of the exchange rate and the removal of the subsidy have exacerbated these challenges, creating a ripple effect that has permeated every facet of contemporary Nigerian life.
At the core of these challenges lies the Naira-to-Dollar exchange rate, currently fluctuating between N1,220 to N1,300 per Dollar. This volatility carries profound implications for businesses, livelihoods, and the overall well-being of citizens, casting a foreboding shadow over the nation’s economic landscape.
According to the National Bureau of Statistics (NBS), an alarming 63% of Nigerians are considered multi-dimensionally poor, totalling 133 million people, based on a 2022 survey. However, more recent statistics by Doris Dokua Susa suggest that nearly 12 percent of the world’s extremely poor reside in Nigeria, measured against the threshold of 1.90 USD per day. Renowned scholar Muhammad Babagoro warns that the number of Nigerians living on less than a dollar per day may double, portraying a stark reality of the nation’s socio-economic fabric.
Promises made by President Tinubu during his campaign for the executive office are now fading, and citizens are growing increasingly disillusioned. The administration, seemingly losing momentum in terms of ideas and focus, must urgently reassess its strategies to honour the social contract promised to the people.
To avert a descent into national failure, bold steps, comprehensive policy reviews, and the infusion of fresh perspectives are imperative. The administration must prioritize the welfare of its citizens by manipulating the exchange rate to stimulate economic growth, foster job creation, encourage self-employment, improve overall welfare, and curb corruption and insecurity.
This analysis serves as a clarion call for collective efforts and strategic interventions to steer the nation away from the precipice and towards a path of sustainable prosperity.
In conclusion, urgent and decisive action is needed to salvage the social contract between the people and the Tinubu administration. Only through a proactive and comprehensive approach can Nigeria navigate these turbulent waters and ensure a brighter and more prosperous future for its citizens.
Rekpene Bassey is the President of African Council on Narcotics (ACON). He is also a Security and Drug Prevention Professional
