Tinubu Govt Overcomes Economic Crisis, Presidency Responds New York Times

The Presidency has reacted to a report published in the New York Times criticizing the Nigerian economy as facing the worst trajectory in a generation.

Bio Onanuka, the Special Adviser to the President on Information and Strategy, responded to a report by Ruth McLean and Ismail Awu on Sunday.

According to the Presidency, the feature story published on June 11 titled 'Nigeria faces its worst economic crisis in a generation’ reflects the usual prejudicial, reductive, derogatory and disparaging manner in which foreign media outlets have been reporting on African countries for decades.

Onanuka said the government should dispel some of the misrepresentations made by reporters on the economic policies of the administration of President Bola Tinubu, who took office at the end of May 2023, due to the report’s 'false’ slant.

He noted that the report painted a bleak picture of the experiences of some Nigerians amid last year’s inflationary spiral and unfairly blamed all the policies of the new administration.

He argued that the report, which is based on several interviews, depicts all gloom and doom without mentioning the positive aspects of the economy or the progressive policies implemented by the central and state governments.

Onanuka insisted that Tinubu did not create the economic problems facing Nigeria today but inherited them.

“As a respected economist in our country said, Tinubu inherited a dead economy.

„Swift surgery is needed to avoid the economy bleeding into an abyss, as happened in Zimbabwe and Venezuela,” he noted.

He explained that this situation led to the policy direction taken by the government in May/June 2023, including abolition of fuel subsidy and consolidation of several exchange rates.

READ  Map showing states with the most developed economies

Nigeria has maintained a fuel subsidy system for decades, consuming $84.39 billion from the public treasury between 2005 and 2022, in a country with significant infrastructure deficits and high demand for better social services.

He also alleged that state oil company NNPCL has racked up trillions of naira in debt due to unsustainable subsidy payments.

When Tinubu took office, he noted that no provision was made for the payment of fuel subsidy in the national budget beyond June 2023.

„There was one notable feature in the budget itself: it planned to spend 97 percent of the revenue servicing debt on recurrent or capital expenditure. The previous government had borrowed heavily to cover such expenditure.”

Onanuka further explained that like oil, the exchange rate is subsidized by government, with $1.5 billion spent monthly by the CBN to hedge the currency against the insatiable demand for the dollar.

“This low rate has led to arbitrage and failures to meet remittance obligations to airlines and other foreign businesses, drying up foreign direct investment and investments in the oil sector.

“To address these issues, Tinubu withdrew the subsidy system and brought in naira on his first day”, Onanuka said.

Despite the initial challenges, Onanuka noted that some stability is being restored, with the exchange rate below N1500 to the dollar and prospects for further appreciation.

He cited a trade surplus of N6.52 trillion in Q1, as against a deficit of N1.4 trillion in Q4 of 2023, and renewed interest from portfolio investors as indicators of improving economic confidence. Loans from the World Bank, AfDB and Afreximbank also contribute to Nigeria’s renewed banking character.

READ  Rachel Reeves distances herself from New Labor economic record

Onanuga highlighted efforts to curb inflation, particularly food inflation, increased agricultural production and state-led initiatives to sell food at lower prices.

„The Dinubu administration has invested heavily in dry season farming and provided incentives to farmers.”

He concluded by comparing Nigeria’s economic challenges with those faced by America and Europe, stressing that the Tinubu administration is working hard to overcome these difficulties.

“Our country faced economic problems in the past, an experience in folk songs. As we triumphed then, we will soon overcome the hardships we face now.

Dodaj komentarz

Twój adres e-mail nie zostanie opublikowany. Wymagane pola są oznaczone *