On May 29th, Bola Ahmed Tinubu resumed office as Nigeria’s president. And his first 100 days have been anything but uneventful. Tinubu’s administration started with fast-paced, hard-knock reforms that he said were necessary for the country’s long-term health.
His first move was the removal of a years-long petrol subsidy that, according to the country’s formerly state-owned oil company, cost $10 billion in 2022. According to Tinubu, the scheme “only benefitted fraudsters and smugglers.” He said Nigeria saved one trillion naira ($1.3 billion) between June and July by ending the subsidy. So, he proposed to redirect savings from ending petrol subsidies to social services such as public transportation, healthcare and education.
The immediate results of this action were a sharp rise in inflation and a steep fall in petrol consumption. According to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Nigerians consumed 46.38 million litres of petrol daily in July. In May, Nigeria’s average daily consumption was 65 million litres. Nigeria’s headline inflation also spiked to 24.08 per cent in July, the highest since September 2005. Many Nigerians started exploring alternative energy sources to cope with the surge. But it wasn’t enough. Relief became an urgent need.
So, Tinubu got the Senate’s green light to get $800 million from the World Bank for short-term relief, or ‘palliatives’ as Nigerians call them. But he delayed a plan to give 8,000 naira (~$10) every month to 12 million households after many people said it was too little. The nation’s statistics office says that 40 per cent of the 220 million people in the country live on less than $1.90 a day, which is the international poverty line. And now, after over 100 days in office, there is no concrete motion to boost consumer spending.
Shortly after removing subsidies, he backed the Central Bank of Nigeria to let the naira float against the dollar. The aim was to scrap the multiple exchange rate system. However, this policy has not achieved that aim. The dollar costs 20% more on the streets than the central bank says it is worth. Rather than unify, the naira has fallen to new lows at the official and parallel markets. A 40 per cent decline in oil production over the last two years and a fall in foreign investments have made it hard for the naira to gain strength. The naira’s fast devaluation has hurt the earnings and raised costs for many Nigerian businesses. Industry giants like Dangote, MTN and Guinness have all declared either losses or earning drops in the last quarter.
Also, Tinubu became the leader of the Economic Community of West African States (Ecowas) on July 10th. In his acceptance speech, he warned against coups in the region. But 16 days later, Niger’s military toppled President Bazoum. Tinubu’s Ecowas gave them a seven-day deadline to restore him, but nothing changed after it expired. Ecowas had another urgent meeting in Abuja with Tinubu there. But Tinubu mostly left the follow-up talks and mediation to envoys, mainly ex-senior officials and religious leaders from Nigeria’s Muslim north. They share a border with Niger, so they are the most vulnerable in the event of a possible conflict.
Meanwhile, the internal security issues Tinubu inherited from his predecessor, Muhammadu Buhari, remain a concern. Kidnapping for ransom increased by six per cent over the past year, and Boko Haram still abduct women in the northeast.
