To the best of my understanding, Nigeria’s economy has long been built on a fragile foundation. From the administration of President Olusegun Obasanjo to the era of President Umaru Musa Yar’Adua (of blessed memory) and Dr. Goodluck Jonathan, Nigeria’s economy operated on a rent-based model.
This was a period when everything, from petroleum to foreign exchange and even basic food products, was subsidized. The system, though seemingly stable, masked underlying vulnerabilities. Our reliance on subsidies created a facade of prosperity, but beneath it, cracks were already forming.
When President Buhari assumed office, it became evident that Nigeria could no longer sustain itself on this shaky financial footing. The truth was laid bare: past governments had not only failed to diversify our economic base but had also depleted the gains made from the Sovereign Wealth Fund. This fund, which should have provided the new administration with a buffer to ease the transition and stimulate growth, was all but eroded, leaving little room for maneuver. Consequently, the attempts to develop from within, generate funds internally, and block financial loopholes have made the administrations of Buhari and now Tinubu seem particularly challenging for Nigerians.
The “feeding bottle” subsidies are no longer available, and we find ourselves grappling with the harsh realities that have long been ignored. The hardships we face today are not solely the making of the present administration but rather the culmination of years of economic mismanagement and neglect. My silence, therefore, is not a reflection of indifference but a response to the economic ignorance displayed by some Nigerians, understandably. Many are quick to blame the current administration, believing it is here to punish them, without considering the rot that has been festering for decades.
The truth is that we are now suffering the consequences of a system that was never sustainable—a system that previous administrations failed to reform. But is there a solution in sight amidst these economic challenges? Absolutely, there is. The good news lies in our recent strides in revenue generation, which has seen tremendous growth in the last few months. Despite paying relatively low taxes, our export sector has contributed significantly to this revenue boost. This is a positive sign, but it is only the beginning.
Investment in agriculture must continue unabated, with a focus on massive mechanization and plantation to ensure food security and sufficiency. Improved storage facilities are crucial and must be encouraged at all levels. The current surge in food prices can be directly linked to the lack of adequate storage, leading to significant post-harvest losses. By addressing this issue, we can stabilize food prices and ensure that our agricultural efforts are not in vain.
Furthermore, the big elephant in the room, fuel subsidy, must be removed. While this move is often met with resistance, it is a necessary step that will translate into bigger revenue for the government. This revenue can then be channeled into developing not only our human resources but also critical capital projects that will drive long-term growth.
In addition, the anticipated operation of the Dangote and Port Harcourt refineries by September will be a game-changer for our energy sector. With these refineries in full operation, we can reduce our dependence on imported refined products, improve our energy security, create jobs, and drastically reduce inflation, all of which will have a positive ripple effect across the economy.
There is light at the end of the tunnel. With a proper understanding of the policies and programs of the government, Nigeria can navigate these challenging times and emerge stronger. The journey to greatness is not without its hurdles, but I believe that with perseverance and the right leadership, Nigeria will attain its rightful place among the comity of nations.
Daramola Taiwo Olarewaju (Reformist)
