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Presidency Responds to New York Times Report: “Tinubu Inherited a Struggling Economy”

The Nigerian Presidency has issued a strong rebuttal to a New York Times article that criticized the country’s current economic situation. The report, titled “Nigeria Confronts Its Worst Economic Crisis in a Generation,” painted a bleak picture of Nigeria’s economy under President Bola Tinubu’s administration, which began on May 29, 2023.

 

In a detailed statement from Bayo Onanuga, Special Adviser to the President on Information and Strategy, the Presidency emphasized that President Tinubu inherited an economy in dire straits. Onanuga clarified that the economic issues plaguing Nigeria were not the making of the current administration but were instead long-standing problems requiring urgent and significant policy interventions.

 

The administration defended its major policy decisions, such as the removal of fuel subsidies and the floating of the naira. These measures, though controversial, were described as necessary to stabilize the economy and address the underlying fiscal challenges.

 

The statement highlighted that the fuel subsidy regime had drained $84.39 billion from the public treasury between 2005 and 2022, exacerbating Nigeria’s infrastructural deficits and financial woes. The national budget, by the time President Tinubu took office, allocated 97% of revenue to debt servicing, leaving scant resources for other essential expenditures.

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Onanuga also addressed the critical state of the exchange rate and public debt. The Central Bank of Nigeria (CBN) had been spending approximately $1.5 billion monthly to maintain an artificially low exchange rate, leading to a significant gap between official and market rates and stifling foreign investment.

 

The Tinubu administration’s decision to unify exchange rates was aimed at curbing these distortions and attracting foreign investment. Early signs of stabilization are evident, with the naira’s exchange rate showing improvement and projections of further appreciation.

 

Despite the challenges, the statement noted several positive economic indicators. Nigeria recorded a trade surplus of N6.52 trillion in the first quarter, attracting long-term portfolio investors and receiving significant loans from international financial institutions such as the World Bank, the African Development Bank, and Afreximbank.

 

The administration has also implemented reforms to address inflation, particularly food inflation. Initiatives include significant investments in agriculture, incentives for farmers, and state-level programs to sell food at lower prices to mitigate the cost of living crisis.

 

The Presidency underscored that the rising cost of living is a global issue, not unique to Nigeria, drawing parallels to similar challenges faced by countries like the USA and those in Europe. The statement expressed confidence that, with continued efforts and strategic reforms, Nigeria would overcome its current economic difficulties, as it has in the past.

 

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