Nigeria’s new President Bola Tinubu vows reset for ailing economy

Tinubu inherits an economy riddled with huge debt from his predecessor Buhari, whose protectionist policies spooked investors.

Nigeria's President Bola Tinubu stands next to his predecessor Muhammadu Buhari during his swearing-in ceremony in Abuja.
Nigeria's President Bola Tinubu (left) stands next to his predecessor Muhammadu Buhari during his swearing-in ceremony in Abuja, Nigeria on May 29, 2023 [Temilade Adelaja/Reuters]

Nigeria’s new President Bola Tinubu vowed at his swearing-in on Monday to expand the economy by at least six percent a year, lift barriers to investment, create jobs and unify the exchange rate, while also tackling rampant insecurity.

“On the economy, we target a higher GDP [gross domestic product] growth and to significantly reduce unemployment,” he said.

He took his oath in an open-air ceremony in the capital Abuja’s Eagle Square. Then his predecessor Muhammadu Buhari finished his eight years in office and departed to his rural home in the northwestern state of Katsina.

Buhari spooked investors with protectionist policies including the closure of borders for months in 2019. Under Buhari, the naira, Nigeria’s currency, also lost 70 percent of its value as Africa’s largest economy struggled to keep pace with ballooning debt.

More than a third of the country’s population is currently unemployed and voters expect Tinubu, 71, to create jobs, fix the free-falling economy and tighten security in line with his campaign promises.

The new president will also deal with shortages of foreign exchange and fuel, nearly two-decades-high inflation, widespread insecurity, epileptic power generation and falling oil production due to crude theft and underinvestment.

“I have a message for our investors, local and foreign: our government shall review all their complaints about multiple taxation and various anti-investment inhibitions,” Tinubu said.

The former Lagos state governor and member of Buhari’s party said a popular but costly fuel subsidy would be gone in line with this year’s budget that set its removal from June onwards.

He also promised a “thorough house cleaning” of monetary policy, adding that the central bank should work towards a unified exchange rate.

“This will direct funds away from arbitrage into meaningful investment in the plants, equipment and jobs that power the real economy,” he said.

Economists are already predicting that Tinubu, who criticised a recent redesign and currency swap, is expected to devalue the naira by as much as 15 percent to help stabilise the economy.

Tinubu also inherits a divided country after his disputed victory that is being challenged in court by his main rivals, who see him as a member of the old guard. In the February elections, he won with only 37 percent of the vote, slightly edging past closest contenders Atiku Abubakar and Peter Obi.

But Tinubu said his electoral victory was fair.

“My supporters, I thank you. To those who voted otherwise, I extend my hand across the political divide. I ask you to grasp it in national affinity and brotherhood,” he said.

The election had galvanised young voters hoping for a break from the two parties that have dominated Nigerian politics since military rule ended in 1999. But what authorities promised would be the freest and fairest election yet ended in frustration for many.

Tinubu said he would tackle widespread violence in Nigeria by reforming the security services with more personnel and improved training, equipment and pay.

Killings and kidnappings for ransom are rampant in the northwest. Separatist and gang violence plague the southeast, and clashes between farmers and herders persist in hinterland states known as Nigeria’s Middle Belt.

Source: Reuters