The need for government to go back to President Tinubu’s 8-point agenda and as well leverage on assets rather than income dependence formed the core of conversations at the just concluded Vanguard Economic Discourse which came up Thursday at the Civic Centre Ozumba Mbadiwe Lagos.
Coming against the backdrop of President Bola Tinubu’s administration’s first anniversary, the event tagged “Reforms in an Era of Global Economic Uncertainties, Whither Nigeria”, featured speakers drawn from various sectors who shared insights on the impact of the economic reforms initiated by the present administration in the past year.
The discourse chaired by one of Nigeria’s foremost economist Dr. Ayo Teriba featured notable speakers including President of the Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) Mr. Dele Oye, Nigerian Labour Congress (NLC) President Comrade Joe Ajaero, Association of Bureau De Change Operators of Nigeria (ABCON) President Aminu Gwadebe, and Managing Director of Financial Derivatives Company Mr. Bismarck Rewane.
Nigeria’s Vice President Senator Kashim Shettima, was represented by Dr.Tope Fasua Special Adviser to the President on Economic Affairs while CBN Governor Yemi Cardoso, was represented by Dr. Blaise Ijebor, Director Risk Management Department.
The discussions began with Dr. Fasua’s address, highlighting President Tinubu’s reform measures, such as petroleum subsidy removal and foreign exchange liberalization, as essential steps towards restructuring the economy.
He further said, “It must be noted that the approach of the Bola Tinubu administration has been to take the ways and means situation head on, setting very tight time limits towards resolving them, classifying the loans properly as part of national debt, and ensuring that any new debts are properly structured. It has been a herculean task. I urge you to think about this effort, given that we have taken a path of strict discipline, total transparency, and accountability.
“Perhaps this, among other efforts, is responsible for the recent upgrades in our sovereign ratings by the world’s best rating agencies. We are on a mission to somewhere greater.
“The government of President Bola Ahmed Tinubu is tackling many of the economic issues in a decisive manner. We are certain that in a short while, every Nigerian will see clearly emerging, a new, fully energized nation, ready to face the world and to take an elevated space in the pantheon of nations.
“Everybody’s contribution to this new vista that we seek, is highly welcome. And we must banish unproductive cynicism. We urge every Nigerian – old and young alike – to view their nation positively, to notice some of positively profound changes happening around them, and to make themselves available for these new opportunities.
“If there is a single word I can search for, to describe the administration of President Bola Ahmed Tinubu, it has to be ‘decisiveness’. One of the greatest attributes of leadership is visioning.
“Another is decisiveness in doing what may not be popular but is necessary. And as we all line up behind a great leader who embeds a great vision for our nation, we committed to the success of key reforms, chiefly around the removal of petroleum subsidies and finding a workable value for the Naira”.
While optimistic about the eventual positive impacts on key economic indicators, critics like Mr. Dele Oye raised concerns about the current foreign exchange policies, attributing them to hyperinflation. Oye emphasized the necessity for stronger government support for local businesses and currency stabilization to address inflationary pressures.
Government should focus on asset leveraging to support economic stability – Teriba
The chairman of the 2024 Vanguard Economic Discourse, Dr. Ayo Teriba, who is also the Chief Executive of Economic Associates, strongly maintained that tightening monetary policy without strong foreign reserve can be futile.
He said the CBN has refused to tell Nigerians what they are doing to ensure that Nigeria builds up its reserves that will support a trillion dollar economy.
His words: “My only concern is the persistence of the volatility of the exchange rate; they are tightening, they are doing administrative interventions, but the big question is that we can all see that the reason exchange rate is volatile is because of the supply and policy inadequacy.
“The Central Bank, in particular the government, said loudly and clearly to banks that they should prepare to build their capital base to levels that will make them able to play in the trillion dollar economy. What I don’t hear anybody from the central bank say, is what they are doing to ensure that Nigeria also builds up reserves that will support the trillion dollar economy?
“It is a conversation that we have to move to the front burner and not coming to tighten monetary policy. Tightening monetary policy without reserve can be futile. Let us speak more about what is being done to ensure $40 billion in reserves is not adequate, even for a $30-50 billion GDP, much less for a trillion dollar GDP”.
Dr. Ayo Teriba echoed these sentiments, emphasizing the futility of monetary policy tightening without sufficient foreign reserves. He advocated for asset leveraging and stronger efforts to bolster Nigeria’s foreign reserves to support economic stability.
Bureau De Changes wrongly targeted over misfortunes of the Naira – Gwadebe
Aminu Gwadebe shifted the focus to corruption as the primary driver of exchange rate volatility, advocating for better stakeholder engagement and root cause analysis. Mr. Bismarck Rewane stressed the importance of institutional reforms and credible policy implementation for effective economic management.
Speaking at the Discourse, he said the government has wrongly targeted Bureau De Changes over the misfortunes of the Naira in the foreign exchange market.
He stated: “One of the major things regulators should look at is stakeholder engagement. However, our experiences over time with stakeholders and security agencies is generalization of stigmatization.
“Most at time, the Bureau de Change are being addressed as the people that are causing volatility in the market. The exchange rate is bad not because of the demand for dollar, but because of the un-earned income that is pursuing naira.
“This is the fact that we always try and avoid where the regulators and the security agency, we put the blame on an ant while leaving the elephant in the house. The elephant in the house is corruption not Bureau de Changes”.
Representing the Chartered Institute of Stockbrokers, Mr. Adeyemi Aina emphasized the significance of a managed float currency system and policies supporting local production to strengthen the national currency.
The discourse revealed a nuanced perspective on the government’s economic reforms, showcasing a blend of optimism and criticism. As Nigeria navigates through economic uncertainties, stakeholders emphasize the need for revisiting Tinubu’s 8-point agenda and leveraging national assets for sustainable economic growth and stability.
Support for local businesses is crucial to the nation’s economic growth – NACCIMA boss
Amidst the seeming defense of government reform measures by the office of the Vice President and the CBN governor, the NACCIMA President, Dele Oye, said that government support for local businesses is crucial to the nation’s economic growth, even as he averred that the current foreign exchange policies of the CBN are the drivers of hyperinflation in the country.
His words: “Every country defends her currency. You can see what America is doing to China to slow them down, so that America can continue to prevail. You can see the way they protect their industries. Countries must defend their own. But in Nigeria, there is nothing for the Nigerian businessman”.
On the cause of the galloping inflation in the country, Oye said, “there is hyperinflation because of forex policies and reforms. There has been significant rise in unsold goods, and these are manufactured goods.
“The private sector is not the problem of inflation, we all know that. If you check, none of us has any money anymore. They have collected it through tax.
“The truth is, the biggest driver of inflation is the value of our currency. So we must make sure we stabilise our currency, which is the beginning and end of our problem”.
FG’s reforms are increasing poverty level – NLC President
Comrade Joe Ajaero criticized the government’s reforms, alleging an increase in poverty levels and a lack of direct economic benefits for citizens. According to him, policies such as floating of the naira, subsidy removal, expansion of the tax base among others, have no direct benefit to the economy or Nigerians. He explained that instead the policies have eroded the economic benefit accrued to Nigerians before the introduction of these policies.
He stated further: “The purpose of any government is for the good of the people, whether workers or whoever. So, you cannot be talking of reserve, saving money, economic policies, while people are suffering and more people going into poverty.
“One of the eight-point agenda of Mr. President is to eradicate poverty but how many people have descended into poverty between May 29th last year till date? Much more people. So the policies we are having are leading more people into clear cases of poverty.
“I have not seen any conscious reform effort by the operators of the Nigerian state today to deal with the economic problems facing the country and I say this without mincing words. The answer is no. Increase in electricity tariff, is that a reform? The answer is no because I want to understand the reforms that are taking place in Nigeria, is the floatation of the currency a reform? No, let us understand what we mean by reforms.
“Is expanding the tax nets a reform? And all these are bringing lots of burdens on the workers. If you check, workers are the main people that pay actual tax. They don’t even have options because it’s deducted from their salary and it’s remitted.
“We are talking about over 30 per cent of inflation, food inflation is about 40% plus. And when this issue of PMS increase was brought up, we challenged them. When we said reverse, they said no. Ajaero go and negotiate wages”.
