As Nigerians head to the polls this month and anticipate the change from one civilian administration to another, expectations are high as to what the incoming government should deliver. This is due in part to the fact that there are several challenging economic decisions that have been implemented by the Buahi-led government.
This year’s presidential election promises to be a keenly contested one between the three major contestants: Atiku Abubakar, Bola Ahmed Tinubu, and the third force, Peter Obi of the Labour party.
Regardless of who wins however, the task of nation building and managing the nation’s economy that beckons on that individual isn’t really an enviable one.
Under President Muhammadu Buhari, the nation has witnessed quite a number of issues reaching a tipping point. While the government thinks it has done quite a lot to be proud of, many Nigerians think the exact opposite.
Terrorism and banditry has grown so much that the government appears helpless in the face of it all. Corruption, which he promised to eradicate has barely abated, if anything, it has increased in numbers under his watch with his tacit and nonchalant posture to such happenings. Security of lives and properties is no longer assured from one state to another. Internal and external loans are at an all time higher than when he came in.
The eventual winner will have some tough economic decisions to make in order to restore Nigeria to the path of progress. Here are some tough economic issues and decisions he will have to deal with upon assumption of office.
Nigeria’s debt stock has tripled under the Buhari administration to a record N42.84 trillion as at the second quarter of 2022.
According to data from the budget office, the federal government has, since its assumption of office, spent more money servicing debt than it has on infrastructure. This is a poor financial management strategy and will be a booby trap for the incoming government. This is because, rather than focusing on developmental projects, the government will be saddled with the burden of servicing this debt to the detriment of progressive and capital projects.
Dwindling external reserve
Under the President Buhari led government, the nation’s external reserve which ought to be a safe haven for the nation to run to in times of need has consistently seen a reduction.
According to figures from the Central Bank of Nigeria, the country’s external reserves fell by $427.14m in one month.
The figures show that the reserves which stood at $37.21bn as of January 18, fell to $36.79bn as of the end of February 16,2023.
Whoever wins the 2023 presidential election has an uphill task of halting this trend and shoring back up the nation’s external reserve.
The petrol subsidy, which has been a thorny subject in Nigeria, is another issue the incoming government will have to deal with. It is one of the challenging economic policies that the Buhari-led government has continued with. While many advocate for its removal, there are also fears that this may end up not being the solution should the government of the day not display thoroughness and accountability that will ensure that the huge savings made from such a decision do not end up in private pockets and are accounted for.
According to the 2022 NESG Macroeconomic Outlook report by the Nigerian Economic Summit Group, Buhari’s payment for the petrol subsidy grew from N307 billion in 2015 to N1.77 trillion in 2021. This represented a 477 percent increase within seven years.
Speaking on the issue, former Central Bank governor, Mallam Sanusi Lamido during his keynote address at the 7th KadInvest, an event organised by the Kaduna State Investment Promotion Agency, said the payment will have to be reviewed but only after the government has displayed a great sense of accountability.
“We have not even started retracing our steps, closing this gap in exchange rates, closing the gap in these inflated subsidies, reducing the subsidy payments. While we are spending 108 percent of our revenues on debt service. Countries cry when they are spending 30 percent of their revenues on debt service. We are spending a 100 percent, we are all laughing. We are having parties. “If we don’t fix this, we are going to have our children curse us till eternity,” he said.
Indeed, the issue of the removal of the petroleum subsidy is one of the big issues the incoming president of Nigeria will have to deal with.
Naira redesign policy
The CBN’s naira redesign policy, which started off in October last year, has so far thrown the nation into confusion, with every day adding a new dimension to the issue. With only a few weeks until the present administration hands over power to the next government, the incoming government sure has a lot to deal with upon assumption of office.
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