Breaking: Presidency Responds To New York Times, Claims Tinubu Inherited A Failing Economy

The article, titled “Nigeria Confronts Its Worst Economic Crisis in a Generation,” was published on June 11 and has attracted significant attention for its critical perspective.

In response, Bayo Onanuga, the Special Adviser to the President on Information and Strategy, described the report as a biased portrayal that continues a long-standing trend of negative depictions of African nations by Western media.

Onanuga argued that the article presents a distorted narrative, unfairly blaming the current economic challenges solely on the administration of President Bola Tinubu, who assumed office at the end of May 2023.

The presidential aide emphasized that the economic difficulties were inherited from previous administrations, countering the notion that they are a direct result of President Tinubu’s policies.

Onanuga accused the New York Times of focusing exclusively on the negative aspects of the Nigerian economic situation, ignoring the significant efforts made by both federal and state governments to mitigate these challenges through various policy measures.

He pointed out that the report failed to acknowledge any positive developments in the Nigerian economy or the remedial actions being undertaken.

He stressed that the administration is committed to turning around the country’s economic fortunes through strategic interventions aimed at alleviating inflation and stabilizing the economy.

“As a respected economist in our country once put it, Tinubu inherited a dead economy. The economy was bleeding and needed quick surgery to avoid plunging into the abyss, as happened in Zimbabwe and Venezuela,” he noted.

Onanuga explained that this context influenced the government’s policy direction in May/June 2023, including the removal of the fuel subsidy and the unification of multiple exchange rates.

According to Onanuga, Nigeria had maintained a fuel subsidy regime that consumed $84.39 billion from 2005 to 2022, in a country with significant infrastructural deficits and a high need for better social services.

Onanuga also alleged that the state oil firm, NNPCL, had accumulated trillions of Naira in debts from absorbing unsustainable subsidy payments.

He noted that when Tinubu took office, there was no provision for fuel subsidy payments in the national budget beyond June 2023.

“The budget planned to spend 97 percent of revenue on debt servicing, with little left for recurrent or capital expenditure. The previous government had resorted to massive borrowing to cover such costs. Like oil, the exchange rate was also subsidized, with an estimated $1.5 billion spent monthly by the CBN to defend the currency against the high demand for dollars in Nigeria’s import-dependent economy.

“By keeping the rate low, arbitrage grew, as there was a significant gap between the official rate and the rate used by over 5,000 BDCs licensed by the Central Bank. The country was also failing to fulfill its remittance obligations to airlines and other foreign businesses, leading to a decline in FDIs and investment in the oil sector, with Emirate Airlines cutting off the Nigerian route,” he said.

Onanuga stated that to address the public finance crisis, Tinubu immediately rolled back the subsidy regime and floated the naira.

“After some months of volatility, with the naira depreciating to as low as N1,900 to the US dollar, some stability is being restored. The exchange rate is now below N1,500 to the dollar, and there are prospects that the naira could appreciate to between N1,000 and N1,200 before the end of the year.

“The economy recorded a trade surplus of N6.52 trillion in Q1, compared to a deficit of N1.4 trillion in Q4 of 2023. Portfolio investors have returned, and when Diageo wanted to sell its stake in Guinness Nigeria, the Singaporean conglomerate Tolaram was ready to buy. With the World Bank extending a $2.25 billion loan and other loans from the AfDB and Afreximbank, Nigeria has regained bankability, thanks to the reforms restoring confidence.

“The inflation rate is slowing down, according to figures released by the National Bureau of Statistics for April. Food inflation remains a major challenge, and the government is working hard to address it by increasing agricultural production.

“The Tinubu administration, along with the 36 states, is working diligently to produce food in abundance to reduce costs. Some state governments, such as Lagos and Akwa Ibom, have set up retail shops to sell raw food items to residents at lower prices than the market.

“In November last year, in line with its food emergency declaration, the Tinubu government invested heavily in dry-season farming, providing farmers with incentives to produce wheat, maize, and rice. The CBN has donated N100 billion worth of fertilizer to farmers, and numerous incentives are being implemented. In western Nigeria, six governors have announced plans to invest massively in agriculture.

“With all these plans in place, inflation, especially food inflation, will soon be tamed.

“Nigeria is not the only country facing a rising cost of living crisis. The USA is also dealing with a similar issue, with families struggling to make ends meet. US Treasury Secretary Janet Yellen recently raised this concern. Europe is similarly experiencing a cost-of-living crisis. Just as those countries are working to confront the problem, the Tinubu administration is also working hard to address Nigeria’s economic problems.

“Our country has faced economic difficulties in the past, as reflected in folk songs. Just as we overcame those challenges, we will overcome our present difficulties soon.”