New broom must sweep Nigeria economy clean
from OKORO CHINEDU in Lagos, Nigeria Nigeria Bureau LAGOS, (CAJ News) WITH the formal inauguration completed, the newly sworn-in president, Bola Tinubu, must shift his focus towards governance responsibilities and challenges ahead in Nigeria.He was on Monday sworn in as the 16th president of the West African country. This significant occasion comes after a strenuous campaign and a fiercely contested presidential race, with the poll held in February.The president’s inaugural address covered a wide range of topics including security, economy, infrastructure, monetary and foreign policy. FBN Quest, the market watcher, highlighted some key parts of his speech to gain insight into his anticipated policies and plans for the country during his term in office.Beginning with the economy, the largest in Africa, the administration aims to achieve a higher gross domestic product (GDP) growth rate in order to address the high unemployment rate, which stood at over 33,3 percent based on the last official data released in 2020.Although no specific target was stated in the speech, Tinubu’s campaign manifesto outlined an ambitious goal of achieving an average annual GDP growth rate of 10 percent over the next four years. He also spoke about implementing budgetary reforms aimed at stimulating the economy and using fiscal reforms such as incentives to enhance the productive capacity of the economy and lessen import dependency.”The speech is likely to be well-received by investors,” FBN Quest stated. It noted Tinubu emphasized the administration’s commitment to addressing the burden of multiple taxes and barriers to investment.Measures will be implemented to facilitate the smooth repatriation of dividends and profits for investors and businesses. Tinubu acknowledged the shortcomings of the existing monetary policy and emphasised the importance of the central bank to work towards establishing a unified exchange rate system.The harmonization of multiple exchange rates will lead to favourable outcomes for the country’s fiscal purse, according to FBN Quest, while a downward adjustment to the naira exchange rate will result in higher naira revenue derived from the conversion of dollar earnings. This is anticipated to close the arbitrage gap between the official and parallel market exchange rates.Tinubu also declared the removal of fuel subsidies, a step seen as necessary to create much-needed fiscal space, but there are concerns regarding the potential social consequences of abruptly eliminating subsidies, especially considering the current double-digit inflation. The new president also revealed plans to tackle security by enhancing the security architecture and investing in security personnel.As his term progresses, it remains to be seen how these policies and plans will be implemented and their impact on Nigeria’s future. “Considering his track record of accomplishments in Lagos state, we maintain a cautiously optimistic outlook regarding his ability to deliver on his promises,” FBN Quest stated.Tinubu takes over a country politically and ethnically divided. The economy is suffering the consequences of an over-reliance on oil and corruption. CAJ News
Source: CAJ News Agency