Tinubu’s interventions fail to tackle Nigeria’s economic hardship in H1 2024

President Bola Ahmed Tinubu’s interventions may have failed to ease the country’s worsening economic hardship in the first half of 2024 despite the government’s Renewed Hope Mantra.

Economists and financial experts disclosed this in separate interviews with DAILY POST.

President Tinubu, a former Lagos State Governor, who celebrated his first anniversary in office on May 29th, 2024, has not found it easy to give Nigerians a vista of hope.

The development comes on the back of the recent approval by the Federal Executive Council for the disbursement of N555 billion to 100,000 families, with N50,000 payment for three months.

Recall that in October 2023, the President also approved the ‘Conditional Cash Transfer’, under the now-suspended minister of Humanitarian Affairs and Poverty Alleviation, Betta Edu.

The scheme, which comes under the $800 million in loan support from the World Bank, was launched on October 17, 2023, by President Bola Tinubu.

Also, as part of the fiscal measure, the federal government recently approved zero tariffs, excise duties, and Value Added Tax on specialized machinery, equipment and pharmaceutical raw materials to bolster local production of essential healthcare products.

Other fiscal measures include a $3.3 billion crude oil-backed prepayment facility from Afreximbank, $2.5 billion World Bank loans to bolster Nigeria’s foreign exchange supply, and efforts by the Presidential Tax and Fiscal Policy Committee to increase taxes.

Despite the interventions, Nigerians have continued to groan over the impact of headline and food inflation which rose to 33.95 percent and 40.66 percent in May, 2024.

The implication is that the purchasing power of Nigerians has dropped in the face of the increasing misery index.

Worse, Nigeria’s debt burden rose to N121.67 trillion at the end of March 2024.

In the 1Quarter of 2024, the country spent $1.12 billion for servicing foreign debt on N3.94 trillion generated revenue in the same period.

This is as Naira weakened to N1508.99 per dollar at the official market on Monday amid several policies announced by the Central Bank of Nigeria; the latest was the discontinuation of the Price Verification System Portal for importers.

Speaking to DAILY POST on Monday, financial expert and the Chief Executive Officer of SD & D Capital Management, Gbolade Idakolo said Tinubu’s policies in the referenced period have not helped to alleviate the hardship on Nigerians.

According to him, welfare policies by the federal and the state governments were yet to be felt by Nigerians.

“My major concern about these measures is the parameters being used to determine those eligible for those grants for three months.

“These welfare policies of the Federal and the state governments have been seen not to get to the intended beneficiaries and the aim is always defeated in the long run.

“I also believe that this measure would not address the hardships being faced by the very poor citizens that these policies are targeted to assist because of continuous high food inflation and skyrocketing cost of living.

“The fiscal policies of Tinubu’s government in the first half of the year has not helped to alleviate the hardship introduced by its monetary policies. This has led to the unbearable situation the country found itself,” he told DAILY POST.

However, Muda Yusuf, the director, Centre for the Promotion of Private Enterprise, CPPE, said the government has carried out a lot of policies but more needs to be done that will impact the generality of Nigerians.

He urged that the government should roll out more fiscal interventions in the agro-allied industry, construction, Iron and steel, and mining sectors.

“There is a lot the government can do via the fiscal policy level. In terms of direct support to the farmers, it is better to do it directly than through the state governments. I think through that, there should be an impact in terms of food production. I hope the state government will commit to this with all sense of sincerity.

“The measure can help the supply side. I am aware that there are also plans to have similar interventions to the real sector.

“The real sector is responsible for Fiscal Policy measures rather than monetary policy. Fiscal policies are more potent in driving production”, he said.

Prof Godwin Oyedokun, a don at Lead City University in Ibadan, said the recent N555 billion cash disbursement approval is a significant fiscal measure aimed at addressing the inflation-induced hardship faced by many Nigerians.

Oyedokun, however, explained that injecting a large sum of money into the economy could exacerbate inflationary pressures if not accompanied by measures to increase supply and stabilize prices.

“The fiscal measures introduced by President Tinubu, including the N555 billion cash transfer program, demonstrate a proactive approach to addressing the immediate economic challenges faced by Nigerians.

“However, the success of these measures depends significantly on the coordination with monetary policies to manage inflation and ensure overall economic stability.

“A holistic approach, combining short-term relief with long-term economic reforms, is essential for addressing the underlying issues causing inflation-induced hardship and achieving sustainable growth,” he told DAILY POST.