Notwithstanding that one year is too short to assess a four-year tenure, President Bola Tinubu has shocked bookmakers with the huge and remarkable ground his solutionist administration has covered, showing unwavering commitment to fostering a conducive environment to long-term local and foreign investments.
This vision is evidenced by a raft of bold reforms to make Nigeria a more attractive destination for business notably major improvement in ease-of-doing-business, tax and fiscal policy reforms, and significant changes in the monetary policies of the Central Bank of Nigeria (CBN). These efforts have not gone unnoticed. The CBN recently reported that foreign currency inflows in the first quarter of 2024 have surpassed the total inflows for the entire year of 2023. Incredible. This surge underscores the growing confidence of international investors in Nigeria’s economic prospects under President Tinubu’s stewardship.
The administration’s drive to attract foreign investment is rooted in its strategic understanding of Nigeria’s saturated domestic market. With the CBN’s new capitalisation policy, banks are required to raise fresh funds, a move designed to stabilize the banking sector and attract foreign capital. This policy requires banks to seek foreign investors, thereby infusing the economy with foreign currency. This inflow of foreign capital is crucial for stabilizing the naira and enhancing the overall economic environment. The expectation is that this will lead to an influx of foreign investors and potential mergers, thereby strengthening the financial sector.
Also, the President’s policies aim to mop up excess cash in circulation and tighten the money supply. By increasing lending rates, the administration seeks to discourage excessive borrowing that significantly drives inflation. The strategy is to channel excess liquidity into the recapitalisation of banks, thereby reducing inflationary pressures. This approach aligns with the broader objective of achieving economic stability and fostering a more sustainable financial ecosystem.
On the fiscal side, the removal of fuel subsidies is pivotal, a decision, though painful, has freed up substantial revenue for the government. The reallocation of these funds has enabled greater financial support for states and local governments, enhancing their capacity to pay salaries and fund critical infrastructure projects. The increased allocations of Value Added Tax (VAT) to the 36 states and 774 Local Governments Areas further underscore this positive fiscal shift capable of driving grassroots governance.
Notably, the improved financial health of states has allowed for better pension payments and boosted purchasing power thereby addressing one of the root causes of poverty in the community of senior citizens.
Findings revealed that total VAT allocations to state governments from June 2023 to April 2024 stand at N2.032 trillion, while the total VAT to the Federal Government from June 2023 to April 2024 is N663 billion. Total VAT allocation to Local Government Councils from June 2023 to April 2024 is N1.368 trillion. It remains to be seen how this fiscal increment translates into incremental development at the grassroots where the bulk of our over 200 million population lives.
President Tinubu’s social policies proactively driven to directly impact the livelihoods of vulnerable Nigerians through instruments such as grants, student loans, food and fertilizer distribution, cash transfers, health insurance, and the imminent introduction of a new minimum wage are designed to provide economic relief to the populace. These measures are not merely short-term fixes but are part of a comprehensive strategy to improve the standard of living and economic resilience of Nigerians.
A notable highlight is the government’s commitment to agricultural development. The administration’s aggressive push to boost food production through the cultivation of wheat and other staples is a testament to its dedication to food security. This initiative, coupled with substantial investments in agriculture, aims to mitigate the impact of high food prices and ensure a stable supply of essential commodities.
The administration’s efforts are also evident in the oil and gas sector. The increase in oil rig activity and crude oil production, coupled with the commencement of production at the new Dangote Refinery, signals a positive trajectory for Nigeria’s energy sector. The reduction in the pump price of diesel and aviation fuel, alongside the anticipated production of refined products from other refineries, underscores the administration’s commitment to fostering competition and reducing dependence on imported fuels.
Furthermore, President Tinubu has shown a keen understanding of the need for educational reform to curb the emigration of skilled professionals. The establishment of the Nigerian Education Loan Fund and policies to increase admission spaces for critical courses are steps towards retaining talent within the country and enhancing the nation’s intellectual capital.
The economic reforms have also led to a significant increase in foreign capital inflows. The impressive $3.6 billion recorded in foreign capital inflow between January and March 2024 is nearly equal to the total for 2023, highlighting the renewed confidence of international investors in Nigeria’s economic policies. Additionally, the Tinubu administration’s fiscal discipline is evident in its decision to prioritize capital expenditure over recurrent spending for the first time in 24 years. This shift is expected to drive substantial infrastructure improvements, providing a solid foundation for sustained economic growth.
In terms of security as a fundamental constitutional responsibility of government, the administration has demonstrated a robust commitment to combating terrorism and ensuring national stability. The efforts of the armed forces and security personnel in addressing security challenges are commendable, and the successful rescue of 137 abducted pupils of LEA Primary and Secondary School in Kuriga, Chikun Local Government Area of Kaduna State exemplifies the effectiveness of these measures.
As the nation moves forward, the first year of President Tinubu’s administration has made a headstart in a manner that makes headway and not just headlines. It has set a promising tone for the future. The combination of strategic economic policies, social initiatives, and a focus on infrastructure and security lays a strong foundation for continued progress.
With a clear vision and decisive actions, President Tinubu is steering Nigeria towards a more prosperous and stable future, ensuring that the sacrifices made by Nigerians today will yield substantial dividends in the years ahead.
Nwakpa, a seasoned journalist and public affairs commentator, writes from Abuja
