Bola Tinubu will be inaugurated as President of the Federal Republic of Nigeria in less than two months, on May 29.
The future administration will inherit a slew of problems that resisted resolution throughout President Muhammadu Buhari’s tenure.
Nigeria has faced numerous economic issues, including high loan rates, inflation, unemployment, and poverty, among others.
According to a UN analysis, Nigeria’s economy under Buhari is worse than it was ten years ago.
In its 2023 World Economic Situation and Prospects report, published on the UN website, the UN stated that high inflation and power supply concerns are weighing on Nigeria’s economy.
“The pandemic has reversed at least a decade of gains in per capita income in some countries—in nearly a third of the region’s economies, including Angola, Nigeria, and South Africa, per capita incomes are forecast to be lower in 2022 than a decade ago,” the UN said in its flagship report, “Global Economic Prospect.”
Gistpeople lists certain economic difficulties Tinubu’s administration may face upon resuming power.
The Monetary Policy
The Central Bank of Nigeria, CBN, announced the redesign of various naira denominations before to the 2023 presidential election. The top bank changed the N200, N500, and N1000 notes, causing widespread suffering in Nigeria.
The strategy nearly ground Nigeria’s economy to a halt since citizens found it impossible to obtain their money, making transactions difficult.
During his campaign, Tinubu accused individuals in power of utilizing the naira devaluation and fuel scarcity to sabotage his presidential ambition. Despite the release of cash, the policy’s impact remains in the country. It remains to be seen how the next Tinubu administration will handle the situation.
Loans
Despite Nigeria’s present debt profile of 44.25 trillion, the Federal Government revealed this week that it has acquired a $800 million loan from the World Bank to be used as palliatives for the termination of gasoline subsidies in June 2023.
Apart from the World Bank loan, the Debt Management Office stated that as of March 31, 2020, Nigeria’s total borrowing from China was $3.121 billion, or 3.94% of Nigeria’s total public debt of USD79.303 billion. Similarly, loans from China accounted for 11.28% of the External Debt Stock of USD27.67 billion at the same date.
One important concern that would face the next government is the worryingly expanding loan facility, which is practically unserviceable.
Insecurity
Insecurity across the country is one of the difficult challenges Tinubu would face upon restoration of office. While Boko Haram and bandits are wreaking havoc in the north, mysterious gunmen are wreaking mayhem in the south. The operations of these gunmen have had a significant impact on Nigeria’s economy under Buhari, therefore Tinubu’s administration will have a lot to deal with.
Unemployment
According to KPMG, the Nigerian unemployment rate has risen to 37.7% in 2022 and is expected to grow to 40% in 2023 due to the continued influx of job seekers into the labor market.
In a newly released report titled ‘KPMG Global Economy Outlook report, H1 2023,’ the multinational consulting firm stated that unemployment will continue to be a challenge due to slower-than-expected economic growth and the economy’s inability to absorb the 4-5 million new entrants into the Nigerian job market each year.
“Unemployment is expected to remain a major challenge in 2023 due to limited private sector investment, low industrialization, and slower-than-expected economic growth, as well as the economy’s inability to absorb the 4-5 million new entrants into the Nigerian job market each year.”
“Despite the fact that the National Bureau of Statistics reported an increase in the national unemployment rate from 23.1% in 2018 to 33.3% in 2020. This percentage is expected to rise to 37.7 percent in 2022 and 40.6 percent in 2023, according to the report.
The rate of inflation
Prior to 2015, Nigeria’s inflation rate remained in the single digits, despite the fact that analysts thought it was excessive at the time. According to official figures, the nation’s inflation rate ranged from 7.7 percent, which was the lowest, to 8.5 percent, which was the highest.
When Buhari took office, the inflation rate averaged 9%. Since then, the country’s inflation rate has skyrocketed. Data issued by the National Bureau of Statistics, NBS, showed that under Buhari, Nigeria’s inflation rate reached a 16-year high amid price increases and low buying power, a position Tinubu would face if elected.
Subsidy for gasoline
Plans for the withdrawal of Nigeria’s petrol subsidy have been finalized just a few months before Buhari’s term ends.
Zainab Ahmed, Minister of Finance, Budget, and National Planning, has hinted that the subsidy might be removed before May 29.
nearly the last five years, Nigeria has spent nearly N3.27 trillion on petrol subsidies, amounting to an average of N272 billion every month.
Eze Onyekpere, the Lead Director of the Centre for Social Justice and a Financial expert, commented on the issues, saying Tinubu and his men would determine if Nigeria’s economy would grow in the next four years.
According to Onyekpere, the economy could develop under Tinubu’s administration provided all essential parties work together.
