Alhaji Atiku Abubakar, the Peoples Democratic Party’s 2023 presidential contender, stated on Tuesday that President Bola Tinubu’s policies have not created prosperity but have instead impoverished the poor and bankrupted the wealthy.
He did, however, emphasise six steps that Tinubu should take to ensure the success of his administration.
The president, who took office on May 29, 2023, with a renewed hope agenda for Nigeria, completed his first year in office on Wednesday (today).
In a statement released on Tuesday, Atiku reviewed the administration’s performance over the previous year, slamming the All Progressives Congress-led government for failing to provide any ideas for economic reform and instead pursuing a mix of policies to address it.
It should be noted that Atiku has previously questioned the administration’s policies, and in response, the presidency has accused him of spotting flaws without giving relevant alternatives.
On Tuesday, however, the former vice president requested that the president pause and reflect, conduct a comprehensive review of the 2024 budget within the new reform framework, conduct a comprehensive review of the Social Investment Programme to mitigate some of the impact of these policies on the most vulnerable households, and refrain from attempting to further impoverish the poor by imposing new taxes or raising tax rates.
He also asked President Tinubu to clarify the fuel subsidy system, including fiscal commitments and benefits from the change, as well as the impact on the Federation Accounts, and to address security straight on.
The former vice president remarked that, as expected, Tinubu’s promises of economic growth and poverty alleviation were not realised 12 months later.
“Tinubu laid out no plans for the remodelling of the economy but soon embarked on a cocktail of policies to achieve it.
“In May 2023, he eliminated PMS subsidies, and a month later, the CBN implemented a new foreign exchange policy that unified the multiple official FX windows into a single official market.
“More policies followed in rapid succession: the tightening of monetary policy to reduce Naira liquidity, a hike in monetary policy rates, the introduction of a cost-reflective electricity tariff, and a cybersecurity tax.
“Predictably, 12 months on, Tinubu’s pledge of growing the economy and ending misery remains unfulfilled. His actions or inactions have significantly worsened Nigeria’s macroeconomic stability.” He said.
He bemoaned that Nigeria remained a struggling economy and was more fragile now than it was a year ago.
“Nigeria remains a struggling economy and is more fragile today than it was a year ago. Indeed, all the economic ills—joblessness, poverty, and misery—that defined the Buhari-led administration have only exacerbated.
“Africa’s leading economy has slipped to the fourth position, lagging behind Algeria, Egypt, and South Africa.
“Citizens’ hopes have been dashed and not renewed, contrary to the propaganda of the administration, as Nigeria’s economic woes have multiplied,” he added.
Atiku added that he had previously expressed worries about the hazards of launching reforms without proper sequencing, clear implementation methods, and without contemplating the potential and actual disastrous repercussions.
The PDP 2023 presidential candidate stated that adopting policies without good planning and a clear destination is nothing more than trial-and-error economics.
“First, President Tinubu’s policies do not create prosperity. Instead, they pauperize the poor and bankrupt the rich. They spare no one. Nigerian citizens, the majority of whom are poor, are going through the worst cost-of-living crisis since the infamous structural adjustment programme of the 1980s.
“The annual inflation rate of 33.69 percent is the highest in nearly three decades. Food prices are unbearably higher than what ordinary citizens can afford, as food inflation soared to 40.53 percent in April, the highest in more than 15 years.
“Nigerian citizens have to pay 114 percent more for a bag of rice, 107 percent more for a bag of flour, and 150 percent more in transport fares relative to May 2023.
“Today, in some locations, motorists are paying 305 percent more for a litre of fuel. Yet, on a minimum wage of the equivalent of $23 per month, Nigerian workers are among the lowest wage earners in the world,” he stated.
He stated that the president’s guts in removing the PMS subsidy did not convert into compassion in raising the minimum wage.
“Tinubu had the ‘courage’ to remove subsidies on PMS and impose additional taxes on his people, but he lacks the compassion to raise the minimum wage or implement a social investment programme that would reduce the levels of vulnerability and deprivation of workers and their families,” he lamented.
Atiku claimed that Tinubu’s policies had created a hostile climate for businesses of all sizes.
He went on to say that the weak policies had swamped the private sector and that he had failed to address the negative repercussions.
“The manufacturing sector, which holds the key to higher incomes, jobs, and economic growth, has been bogged down by rising input prices, higher energy and borrowing costs, and exchange rate complexities.
“For example, since 2023, the average price of diesel has doubled to N1,600 per litre. The electricity tariff has recently been increased by 250 percent, from N68/Kwh to N206/Kwh.
“As reported by the Guardian (May 13, 2024), in Q1 of 2024, energy prices were up by 70 percent, costing manufacturers N290 billion.
“Since May 2023, corporate Nigeria has lost more than a dozen enterprises to other countries. Unilever, GlaxoSmithKline (GSK), Procter & Gamble (P&G), Sanofi-Aventi Nigeria, Bolt Food, and Equinor, among others, had exited Nigeria, citing reasons including foreign exchange complexities, security concerns, and high operational costs.
“According to the Nigeria Employers’ Consultative Association (NECA), nearly 20,000 jobs may have been lost due to the departure of 15 multinational companies from Nigeria,” Atiku said.
The former vice president cautioned that an economy with high unemployment and a shrinking manufacturing sector was unsustainable.
He also stated that Tinubu’s foreign exchange measures have failed to improve Nigeria’s international trade balance, contrary to predictions.
“In particular, the free float and the resulting devaluation of the naira have not resulted in an appreciable improvement in Nigeria’s trade balance. Devaluation has not enhanced the competitiveness of local producers and has had no positive impact on exports of goods, primary or manufactured.
“President Tinubu’s policies have failed to attract foreign investments into the country despite all the posturing and media hype by the president’s men. Exchange rate unification and the free float of the naira have not led to higher capital inflows (whether foreign direct investment or foreign portfolio investment), contrary to policy expectations,” the former vice president said.
Atiku then voiced disappointment that, despite a variety of monetary policy measures, inflationary pressures and currency rate swings continued.
He blamed Tinubu’s faulty policies for the naira’s steep slide versus the dollar, which has resulted in it becoming the world’s worst-performing currency.
He observed that Tinubu’s initiatives demonstrated an overestimation of their efficacy and a lack of preparedness for potential consequences.
Atiku pointed out that Tinubu and his staff appeared unclear about the current condition and next steps of the reform process, as he urged the administration to understand the necessary reforms and their sequence, emphasising the importance of a framework detailing reform goals and methods.
Atiku, as a result, urged for a thorough examination of the 2024 budget under the new reform framework.
“The 2024 FGN Budget, the exact size of which remains a mystery, is not designed to address the structural defects of the Nigerian economy or the cost-of-living crisis. It will neither create prosperity nor promote opportunities for our young people to lead a productive life.”
He said, “The review must prioritise fiscal measures to deal with an unprecedented rise in commodity prices. Higher commodity prices have created more misery for the poor in our towns and villages and have pushed millions of people below the poverty line. One such measure for immediate implementation will be to ease the existing restrictions on selected food imports.
“Third, undertake a comprehensive review of the Social Investment Programme (SIP) to mitigate some of the impact of these policies on the most vulnerable households. The SIP must go beyond conditional cash transfers to include programmes that prioritise support for MSEs across all economic sectors, as they offer the greatest opportunities for achieving inclusive growth.
“In addition, a holistic programme to support medium- and large-scale enterprises to navigate the stormy seas in the aftermath of the withdrawal of subsidies on PMS is also needed,” he said.
He also condemned any plan to introduce additional taxes or increase tax rates by the administration.
“We are aware of the behind-the-scenes attempts to increase the VAT rate from 7.5 percent to 10 percent, re-introduce excise on telecommunications, and increase excise rates on a range of goods.
“It needs to be reiterated that we cannot tax our way out of this situation. Instead, Tinubu must see the need for expenditure rationalisation and restraint by having the budget more in sync with Nigeria’s fiscal reality, by improving efficiency in revenue utilisation, improving procurement processes, and trimming the size of government and, therefore, reducing the cost of governance.”
Atiku urged Tinubu to promptly address insecurity and highlighted that the widespread insecurity significantly hampered agricultural production and its contribution to the economy, particularly in the northern region of the country.
“The state of pervasive insecurity continues to adversely impact agricultural production and the value it brings to the economy, especially in the northern parts of the country.
“Insecurity resulting from terrorism, banditry, kidnapping, and cattle rustling has compelled many crop farmers and pastoralists to abandon their lands and relocate to the neighbouring countries of Niger, Chad, and Cameroun.
“This has drastically caused a reduction in the production of food and skyrocketed the prices of foodstuffs. Food scarcity in Nigeria is so dire that a report by Cadre Harmonise warns that between June and August this year, about 31.5 million Nigerians may face severe food shortages and scarcity,” he said.