The Independent Media and Policy Initiative (IMPI) has said that President Bola Tinubu‘s policies will eventually have a positive impact on the Nigerian economy in spite of the short-term pains.
The policy think-tank stated this after analysing the President’s nationwide broadcast in the aftermath of the August 1 to 10 protests.
In a policy statement signed by its Chairman Niyi Akinsiju, IMPI compared the Tinubu administration’s policy thrust to that of some former Western leaders which were initially vilified, but later hailed as successful.
“To illustrate this, we recall the vicious attack on the economic policies adopted and implemented by the administration of President Ronald Reagan in the United States of America between 1981 and 1989. Late President Reagan’s policies were described by opposition figures as voodoo economic policies.
“However, the Reagan years were described, afterwards, as the years of prosperity with interest rates, inflation rate, and unemployment falling faster than they did immediately before or after his presidency.
“In the same vein, we also recall the place of Mrs. Margaret Thatcher in the making of modern Britain. On becoming the British Prime Minister after winning the 1979 general election, Thatcher introduced a series of economic policies intended to reverse high inflation, which later paid off. But Britain had struggled against those measures then in what was described as ‘Winter of Discontent.’
“Her political philosophy and economic policies emphasized greater individual liberty and the privatisation of state-owned companies while reducing the power and influence of trade unions.
“The economic and political preferences were fondly labelled Thatcherism by supporters. Today, major political parties in Britain accept the trade union legislation, privatisation, and general free-market approach to government.
Yet her critics, while in government, vociferously claimed that her administration’s successes were obtained only at the expense of great social cost to the British population.
“In our consideration, the August 1-10, 2024 protest is evidence of the usual intolerance to new thinking and innovative policy-change implementation as experienced by the leaders of countries highlighted above”, it added.
While dissecting President Tinubu’s speech, the policy group outlined the pragmatic thinking behind many of the initiatives of the Tinubu administration
IMPI said: “By our findings, we have established the relatively cheap cost of CNG compared to Premium Motor Spirit, otherwise known as petrol. Our independent investigation shows that 50 litres of PMS is equal to 30 kilogrammes of CNG. Whereas the average fuel economy for PMS is 10 to 15km per litre for a typical passenger vehicle, the average fuel economy for CNG is 20 to 25km per kilogramme.
“This, if mathematically captured, will be as follows: 50 litres of PMS at N650 per litre is N32,500, while 30kg of CNG at N250 will amount to N7,500 with a difference of N25, 000.This, to our mind, is pragmatic thinking.
“Going forward, we note with interest the bouquet of ongoing implementation of programmes as highlighted by the President in his speech. These include the Consumer Credit Corporation, which has moved from the drawing board to disbursing credits to eligible beneficiaries, the first time of such in the history of this country.
“In tandem with this is the Nigeria Education Loan Fund (NELFUND) or the student loans scheme, another revolutionary initiative to support education. By our checks, we understand that more than N2.5bn had been disbursed as loans to qualified beneficiaries out of the N150bn establishment fund in the first three weeks of commencement of operations.
“President Tinubu also revealed the federal government’s activation of the technology and innovation industry with $620m under the Investment in Digital and Creative Enterprises (iDICE) programme.
“The programme which objectives include empowering young people, creating millions of IT and technical jobs and producing millions of technical talents, confirmed the forward-looking capacity of the President who determined that the national developmental trajectory will be pivoted on technology and innovation.”
IMPI also acknowledged President Tinubu’s assertion that his policies have paved way for an increase in the nation’s earnings without a need to raise taxes or pile up more debts.
The policy group said: “The President’s revelation of the reduction of revenue used in servicing national debt from 97% to 68% over a 13-month period is not only heartwarming, but also suggestive of an economy that is distancing itself from profligacy hallmarked by the fuel subsidy regime and multiple foreign exchange windows.
“Again, in fundamental ways, we reasoned that the recorded revenue to debt service ratio reduction is a consequence of the removal of fuel subsidy and more dollar inflow into the economy which reflected in the $24bn foreign exchange inflow in the first half of 2024. This compared positively with the $7.29bn inflow in the first half of 2023.
“Deriving from the above, we expect a further reduction in the debt service ratio with the increase in national income and reduced national inclination to acquire more debts. This implies availability of more revenue to provide for the critical needs of the Nigerian people as already exemplified in the total distributable revenue for the three tiers of government in first half of 2024 which is stated at N12.45trn compared to the N5.2trn for the same period of 2023.
“As the President puts it, this quantum leap in revenue availability to the three tiers of government has given the country more financial freedom as well as the room to spend more money on citizens and to fund essential social services like education and healthcare.
“It has also led to the States and Local Governments receiving the highest allocations ever in the country’s history from the Federation Account.
“What the President said concerning budget and revenue is that the nation’s budget that had been characterized by perennial deficit, has for the first time in many years reduced by 29 percent to N2.83trn in the first quarter of 2024 from N3.96trn in the same period of 2023.”
It added that it was remarkable that the policies have now began to yield fruits with July inflation figure showing a decline for the first time in almost two years.
