President Tinubu needs to know that Nigerians have been patient, but the patience is fast running out because the pains are becoming unbearable!

Introduction

President Tinubu in his nationwide broadcast following protests that have erupted in some parts of Nigeria put forward initiatives the government is working on to improve the economic situation in Nigeria which deserve commendation.

However, contrary to the President's belief that his decision to "remove fuel subsidies and abolish multiple foreign exchange systems" requires patience by citizens because the policies will ultimately yield positive results for the economy is flawed. Here is why:

  1. Fuel subsidy removal - for so long as President Tinubu fails to address the refineries question and Nigerians continue to buy petrol at N700-N1000 a litre and more for diesel with routine products scarcity, even if Nigerians are patient for the next 3 to 7 years, the pains will not lessen. The only way this fuel subsidy policy will ultimately be beneficial is if the President takes operatorship of our 4 refineries from the NNPCL and hands it over to globally renowned private sector downstream operators who will fix the refineries and supply petroleum products at far cheaper prices to Nigerians. Government can maintain ownership of the refineries but so long as an obviously incompetent NNPCL is not the operator, things will change for the positive. Without reducing fuel costs, the initiatives announced by the President for digital skills, agriculture and other businesses may be hard to see through and citizens will continue to groan in agony from high transportation and production costs!
  2. Abolishing multiple exchange rate systems - this policy which has crashed the value of the naira from about N450 to a dollar before May 2023 to about N1,600 to a dollar today thus making imports including food and pharmaceuticals very expensive and out of reach of most Nigerians will continue to perpetuate poverty on the citizens even if they are patient for the next 3 to 7 years except other policy measures are taken including boosting power supply which will ignite local production of goods and services to reduce dependency on imports, crash prices, create jobs and tame inflation.
  3. Removal of electricity subsidy - for so long as power supply hovers around the 3-4kMW mark for 200 million people when it should be at least 100kMW, even if Nigerians wait patiently for the next 3-7 years, this reform will only generate hardship and poverty for the citizens! The only way this policy will be ultimately beneficial to Nigerians is if power supply is increased to at least 30kMW in the next 3 years. At the point of privatisation of telecoms, NITEL was supplying only 500k telephone lines thus making the cost of owning a telephone line to be very expensive. When the private sector (MTN & co) came onboard they have so far invested over $100bn to boost supply of telephone lines to over 200 million today and because of this huge supply the unit cost of owning a telephone line has crashed to almost nothing! The opposite is the case with the power sector privatisation where NEPA was supplying 4-5kMW and after privatisation instead of boosting supply we are rather down to 3-4kMW with national grid routinely crashing! It means the private sector operators especially the DISCOs have not invested much in the sector. Instead of the minister for power reading the riot act to the power sector operators to invest to boost supply, he is championing tariffs increase to generate enough revenue from only 3kMW to meet all the costs of these private operators! Imagine if MTN & co were to generate all their revenues from only 500k telephone lines that NITEL operated pre-privatisation, the cost of telephones will still be high and unaffordable! The President must accompany the electricity subsidy removal policy with decisive action by transferring TCN (starved of funding) to globally renowned private sector operators and re-awarding the DISCOs licences (currently held by hurriedly incorporated shelf companies that neither have the money nor the technical capacity to invest) to equally renowned global power sector distribution operators who will commit billions of dollars of investment to boost capacity! Digital and creative enterprises announced by the President need power. Same for technical talent scheme will do better too with sufficient power. Nano businesses can't survive without power. The business loans may be hard to unlock value and may remain unpaid if power supply deficit persists.
  4. The President also needs to address other underlying economic drivers like security for farmers, Agric mechanization, railways, steel plants, domestic gas, road infrastructure etc. These are some of the pillars to build an economy upon. Without them we may try to build but the efforts won't go far enough!
  5. The Govt does not need to provide these pillars by itself but create the enabling environment for the private sector to step in with billions of dollars of investments.
  6. It's not expected that all these pillars will be in place within 14 months of the life of this administration but the processes to get them in place need to be kick-started in earnest.
  7. In summary, President Tinubu must accompany his policy reforms on fuel, electricity, exchange rate etc with complementary policies that bring succour to the citizens else what is happening now is like the President performing surgery without anaesthesia! The patient (the economy and citizens) will most likely die on the operating table instead of getting better!


Conclusion

President Tinubu needs to know that Nigerians have been patient, but the patience is fast running out because the pains are becoming unbearable! Policies to mitigate the sufferings must be activated urgently and only then will the patience of Nigerians be obtained. When you are hungry but there's evidence that food is being prepared in the kitchen, you are more patient! Nigerians aren't seeing action in the kitchen which is resulting in the impatience! The President and his cabinet need to get into the kitchen fast!