June 1, 2023/CSL Research
It’s no longer news that Nigeria has a new sheriff in town. The new president of Nigeria, Bola Ahmed Tinubu (BAT) has succeeded Muhammadu Buhari who left office after completing his two four-year terms. President Tinubu won Nigeria’s presidential election in February on the platform of the governing APC party.
He becomes the country’s sixteenth leader and fifth democratically elected president since the country returned to democracy in 1999. BAT based his campaign on his scorecard as a former governor of Lagos state where he is credited with boosting its economy through a significant increase in Internally Generated Revenues (IGR) and industrial development as well as improving the state’s transport system. The task before Bola Tinubu as he leads Africa’s largest economy and most populous country is enormous and the general expectations are high.
BAT in his inaugural address at Eagle Square unveiled a couple of steps he would take to put the country back on the path of economic development, stability, and prosperity. The new president noted that steps to reform Nigeria’s security architecture remain his top priority. He noted that he would invest more in security personnel, and provide better training, equipment, pay, and firepower.
On the economy, the new president stated that his administration is targeting a GDP growth rate of 6% and plans to significantly reduce unemployment. He noted plans to implement budgetary reforms to stimulate the economy without causing inflation, utilize fiscal measures to promote local manufacturing and reduce import dependency, and improve access and affordability of electricity to businesses and homes by improving power generation, transmission, and distribution networks.
He answered the pertinent question of fuel subsidy, noting that the fuel subsidy has been permanently removed as the current budget makes no provision for it. He stated that the funds used to pay subsidies will be directed to investments in public infrastructure, education, healthcare, and job creation. The new president said that his administration would create meaningful opportunities for youths by fulfilling their campaign promise of generating one million new jobs in the digital economy. He promised to work with the National Assembly to create an omnibus Jobs and Prosperity bill that will give them the policy space to embark on labor-intensive infrastructural improvements, encourage light industry, and provide better social services for the poor, elderly, and vulnerable.
key points from the inaugural speech were the president’s take on monetary policy and FX, noting that there is a need for a total clean-up of Nigeria’s monetary policies. He noted that the Central Bank would work towards a unified exchange rate. He further stated that interest rates should be lowered to increase investments and consumer purchasing power. We believe that the new president faces an enormous challenge in repositioning Nigeria on a path of recovery. Improving security, increasing revenue generation, FX, and food supply, reducing inflation, eliminating the fuel subsidy regime, and reducing the debt burden of the country are all issues that should be on the front burner for the new President.
