The Presidency on Sunday replied New York Times over its negative report on the Nigerian economic situation, describing the report as misleading and bias.
This is contained in a statement issued by the Special Adviser to the President on Information and Strategy, Bayo Onanuga.
The presidency said Ruth Maclean and Ismail Auwal’s feature
story with the title ‘Nigeria Confronts Its Worst Economic Crisis in a
Generation’, published on June 11, reflected the typical predetermined,
reductionist, derogatory, and denigrating way foreign media establishments
reported African countries for several decades.
“Because of the misleading slant of the report, we need to
clear up some misconceptions conveyed by the reporters as regards the economic
policies of the Tinubu administration that came into power at the end of May
2023.
“Most significant about the report was that it painted the
dire experiences of some Nigerians amid the inflationary spiral of the last
year and blamed it all on the policies of the new administration. The report,
based on several interviews, is at best jaundiced, all gloom and doom, as it
never mentioned the positive aspects in the same economy as well as the
ameliorative policies being implemented by the central and state governments,”
he said.
“To be sure, President Tinubu did not create the economic
problems Nigeria faces today. He inherited them. 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 being plunged into the abyss, as
happened in Zimbabwe and Venezuela. This was the background to the policy
direction taken by the government in May/June 2023: the abrogation of the fuel
subsidy regime and the unification of the multiple exchange rates,” the
statement added.
According to the presidency, for decades, Nigeria had
maintained a fuel subsidy regime that gulped $84.39 billion between 2005 and
2022 from the public treasury in a country with huge infrastructural deficits
and in high need of better social services for its citizens.
It said the state oil firm, NNPC, the sole importer, had
amassed trillions of naira in debts for absorbing the unsustainable subsidy
payments in its books, saying that by the time President Tinubu took over the
leadership of the country, there was no provision made for fuel subsidy
payments in the national budget beyond June 2023.
“The budget itself had a striking feature: it planned to
spend 97 percent of revenue servicing debt, 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 being subsidized by
the government, with an estimated $1.5 billion spent monthly by the CBN to
‘defend’ the currency against the unquenchable demand for the dollar by the
country’s import-dependent economy.
“By keeping the rate low, arbitrage grew as a gulf existed
between the official rate and the rate being used by over 5000 BDCs that were
previously licensed by the Central Bank. What was more, the country was failing
to fulfil its remittance obligations to airlines and other foreign businesses,
such that FDIs and investment in the oil sector dried up, and notably Emirate
Airlines cut off the Nigerian route,” the presidency explained.
The presidency added that Tinubu had to deal with the cancer
of public finance on the first day by rolling back the subsidy regime and the
generosity that spread to neighbouring countries and then, his administration
floated the naira.
“After some months of the storm, with the naira sliding as
low as N1,900 to the US dollar, some stability is being restored, though there
remain some challenges. The exchange rate is now below N1500 to the dollar, and
there are prospects that the naira could regain its muscle and appreciate to
between N1000 and N1200 before the end of the year.
“The economy recorded a trade surplus of N6.52 trillion in
Q1, as against a deficit of N1.4 trillion in Q4 of 2023. Portfolio investors
have streamed in as long-term investors. When Diageo wanted to sell its stake
in Guinness Nigeria, it had the Singaporean conglomerate, Tolaram, ready for
the uptake. With the World Bank extending a $2.25 billion loan and other loans
by the AfDB and Afreximbank coming in, Nigeria has become bankable again. This
is all because the reforms being implemented have restored some confidence.
“The inflationary rate is slowing down, as shown in the
figures released by the National Bureau of Statistics for April. Food inflation
remains the biggest challenge, and the government is working very hard to rein
it in with increased agricultural production.
“The Tinubu administration and the 36 states are working
assiduously to produce food in abundance to reduce the cost. Some state
governments, such as Lagos and Akwa Ibom, have set up retail shops to sell raw
food items to residents at a lower price than the market price.
“The Tinubu government, in November last year, in consonance
with its food emergency declaration, invested heavily in dry-season farming,
giving farmers incentives to produce wheat, maize, and rice. The CBN has
donated N100 billion worth of fertiliser to farmers, and numerous incentives
are being implemented. In the western part of Nigeria, the six governors have
announced plans to invest massively in agriculture,” the presidency explained.
The presidency added that with all the plans being executed,
inflation, especially food inflation, would soon be tamed, adding that Nigeria
is not the only country in the world facing a rising cost of living crisis.
“The USA, too, is contending with a similar crisis, with
families finding it hard to make ends meet. US Treasury Secretary Janet Yellen
raised this concern recently. Europe is similarly in the throes of a
cost-of-living crisis. As those countries are trying to confront the problem,
the Tinubu administration is also working hard to overturn the economic problems
in Nigeria.
“Our country faced economic difficulties in the past, an
experience that has been captured in folk songs. Just like we overcame then, we
shall overcome our present difficulties very soon,” it stated.
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