Tinubunomics: Are There Not Causes?

Olaniran Olayinka

While delivering his sermon on Sunday, August 13, my Parish Pastor spoke, among other things, on the challenges David faced even from his siblings before he eventually conquered Goliath.

Quoting the relevant Bible passages in the Book of Samuel, David’s own Brother – Eliab who in company with his two other brothers were with King Saul in the battlefield and have been terrified and clueless for more than 40 days on how to tackle Goliath, joined in deriding his younger brother – David on his effrontery to challenge Goliath whom they have all been running away from out of fear.

David responded to the Army of Israel who was trying to discourage him from taking up the challenge:  Isn’t there a cause? By which he meant have we not gone through a lot and seen enough in the hands of this Philistine to stoke the anger in me and face this Goliath?

Truly, there was a cause- Goliath the Philistine had been taunting and deriding the God of Israel before David decided to intervene.

Eventually, he did and succeeded in killing Goliath with his catapult that bore God’s anointing.

Coincidentally, same day, I read an article written by the prolific journalist and GMD, Leadership Newspapers – Mr. Azu Ishiekwene titled Tinubu’s List, Gbajanisation and Nigeria’s Politics.

I was struck by his opening statement which I quote here, inter alia “If President Bola Ahmed Tinubu hit the ground running, it was because problems chased him into office.”

Listening to the Pastor and reading Azu’s article same day, I felt driven to put down this message so that Nigerians can rightly judge whether or not the initiatives of President Bola Ahmed Tinubu (PBAT) policies since the inception of this administration, were indeed borne out of the urgency to tackle headlong the challenges holding down the progress of our country and chat the pathways to the rediscovery of this nation’s lost glory.

Personally, I am of the opinion that the policies introduced since May 29, 2023 this regime are in order. There are causes to them.

The title of this write up – Tinubunomics: Are There Not Causes? Therefore, has been derived from an adoption of what David said in response to Eliab his brother.

Indeed, there were (and still are) causes for President Tinubu’s decisions since inception of this regime.

Nigeria has been punching below it’s weight in almost all performance indices.

Insecurity, unemployment and under-employment, hunger, lack of access to basic medical facilities, inadequacy of qualitative education, etc, etc are what the citizens grapple with on daily basis Year-in-Year-out.

Upon inauguration into office, PBAT has introduced four key major policies that   I like to speak to so we will understand the urgency of the situation in this country: Withdrawal of subsidy on Premium Motor Spirit (PMS); foreign exchange rate floating; introduction of students loans; and tax reforms.

On withdrawal of fuel subsidy which has now driven the pump price of PMS to more than 300% from the subsidized rate of about N180/litre, it was a decision long overdue.

Nigeria was spending borrowed funds to finance payment of subsidies to the tune of almost N7trillion annually according to the report released by the NNPC.

Evidently, this was a major scam as the average volume claimed to have been consumed daily ballooned in excess of 65 million litres daily. And Subsidy was paid on entire volume a greater portion of which ended up in neighbouring countries.

Nigeria’s subsidised fuel was being sold in all neighbouring countries with rogue traders cleaning out big time to the detriment of the collective benefits of Nigerians.

With the removal of subsidy on PMS, the estimated annual N7trillion hitherto paid out as subsidies  will now be channeled towards positive interventions in the various sectors with funding gaps..

On the foreign exchange rate “floating” the truth of the matter is that the arbitrage (about N300/1USD at its peak) that existed hitherto was unsavory as some people were only benefiting from the brokerage thus denying the country the required funds for economic development.

With the floating of the rate and conversion of foreign exchange receipts from old rate of N460/USD to about N745/USD (call it devaluation if you like) that’s almost 62% increment in Naira revenue from that source.

This has released extra Naira to the common purse.

Users of foreign exchange are more interested in stability of exchange rate for planning purposes. The pressure on demand for foreign currency should be deliberately stemmed through massive reduction of the present situation where we import practically everything particularly PMS that is the major consumer of foreign exchange. 

 The immediate manifestation of subsidy withdrawal and FX rates floating combined ensured the funds available for distribution among the three tiers of government in July alone rose to an unprecedented level of N1.9TRN from all available sources.

We can see from these two bold initiatives that economic prosperity is in offing for as long as the funds are judiciously utilised.

The third initiative – introduction of students loans is one of the most profound decisions of any government in a long while.

Whoever feels education is too expensive should consider the costly effects of ignorance.

The transformative power of education is not debatable. And that’s why nations pay attention to the education of their youths.

Any initiative therefore that supports access to education is a welcome one and must be supported by all irrespective of political leanings.

In the United Kingdom for example, average loan per student is about £19,000/annum which adds up to almost £60,000 in three years of study.

In the United States of America, it’s about $10,000/annum which adds up to an average of $40,000/student in four years of study.

If loans are made available to students, it will eliminate the twin-evils of ASUU/NASU strikes as well as students unrest in our tertiary institutions.

And the federal government will no longer have to allocate scarce funds directly to universities annually as is presently done.

A major factor militating against planning in this country is inaccuracies of data.

This manifested as there are no accurate data on the total number of universities in Nigeria as at today.

Numbers ranging from 195 to 250 have been mentioned for approved public and private universities  even in the portal of the National Universities Commission (NUC) – the umbrella regulatory agency for these universities.

And when it comes to students enrollment, about two million students are said to be enrolled in these institutions out of which between 5% to 10% are enrolled in private Universities where they pay commercial rates.

This leaves about 1.8million student’s enrollment in public institutions. These students are the targets of the loans.

Assuming, without conceding, that all the 1.8million students will require loans, I recommend an average of N1million per student annually which translates to N4million for a four-year course of study.

It is not too much a sacrifice to allocate about N2trillion to this scheme annually. Or are we implying a Nigerian student is not worthy of N1million assistance from the government annually?

In the United States, outstanding exposure on students loans is about USD1.7trillion as at 2021.

From the N1million per annum, School fees should gulp N500,000, accommodation and books another N200,000 and the remaining N300,000 for feeding in addition to whatever their parents can assist with to ensure the students feed well.

With N500,000 as fees per student yearly, the Universities will have the required revenue to pay their staff well and still have funds left to improve on the facilities required on campuses for learning.

By so doing, the twin evils of incessant staff strike and students unrest would have been resolved permanently. Private universities don’t have these issues because they are adequately funded from fees paid by the students.

Endowments and Research Grants should also be vigorously pursued by these universities as is done by institutions elsewhere.

Funds from these windows will come in handy for capital projects.

I have listened to the arguments of some nay sayers that students loans will impose debts on students.

They deliberately forget to mention that repayment of these loans will only commence when the beneficiaries have started to work upon completion of their programs.

Where then is the debt burden? They are simply being mischievous.

It makes more sense to be educated with debt than to remain uneducated without debt.

I was therefore taken aback  when ASUU opposed, in its total ramifications , the idea of students loans.

There is an adage that goes “Won n gba omo Adiye Lowo Iku, o ni wan o je ki ohun lo aatan lo je (they are trying to safe a chick from an untimely death from the hand of a hawk. But it complained of not been allowed to visit the dump site” Meanwhile, it’s at the dump site the hawks will prey on the chicks.

Why are they opposed to this noble idea that will eradicate incessant strikes and students unrest?

Are they happy with the present situation where universities close for an average of 6 months each academic year thus distorting academic calendars and elongating number of years students spend before graduating, or where professors earn an equivalent of 500$ monthly?

I think they should be well-guided and have a rethink.

Let me sound a note of warning to the government: Another students strike is imminent when colleges resume in September and the idea of raised school fees crystallises.

Students will go on strike if the issue of loans is not resolved in their favor before the resumptions.

It is therefore important government roll out modalities for operating this noble idea of  students loans immediately.

On the issue of a tax reforms, The Taiwo Oyedele – led Tax Reforms Committee have estimated an annual tax gap of almost N21trillion.

If  whatever recommendations the committee will put forward are well implemented, the implication is that Nigeria will no longer require humongous borrowing before having resources to execute developmental programmes.

And what is exciting about the tax reforms initiative  is that Taiwo Oyedele mentioned in a recent  interview that the SMEs/Nanos should ideally be exempted from paying taxes so they can grow being engines of growth that require nurturing at infancy.

I therefore reckon that the committee must have taken this into consideration before arriving at the N21trillion tax gap mentioned.

The truth is that majority of eligible tax payers in Nigeria don’t pay taxes. They either evade or avoid payment of tax.

With tax to GDP ratio of about 5%, Nigeria’s is one of the lowest in the world.

The target of the committee is to achieve about 18% within the next three years.

I therefore have no doubt the N21trillion tax gap is realisable.

The reality on ground is that people are going through unimaginable pains from these policies. But these pains will be temporary.

On taming the continuous rise in local price of PMS, it is important local supply through fixing of the local refineries and licensing of several modular refineries are expeditiously looked into. I leave the modalities for subject-matter experts to handle.

The embarrassing toga of being a major crude producing nation and yet a major importer of refined products must deliberately be discarded as it is a major cause of the distortions in this economy High transportation costs impact all spheres of endeavors.

Also, with imports of refined products responsible for more than 80% of foreign exchange utilisation, reversing this trend will be a major achievement towards repositioning the economy.

For as long as we continue to depend on its import its price determined largely by international price of crude as well as the local value of the dollar used in importing it, local prices will continue to soar.

Governments at all levels should also deliberately invest in Mass Public Transportation systems across the country so movement from one point to another  can be accessed at minimal  costs.

It is better to subsidise public transportation and deploy facilities massively across the country so goods and services can move at cheaper prices than subsidizing PMS with its attendant corruption.

Students should be able to have free ride in designated buses to and from their schools daily as is done elsewhere.

There is no reinventing the wheels. It is just to study and adopt what others are doing in this regard.

In addition to the above-mentioned reforms, intervention in other critical sectors like Energy (power), agriculture for food security, health, roads, railways, etc must be prioritized.

On the issue of Health for instance, it must be accessible and affordable. Emphasis should be on Primary Health facilities that will cater for the minor ailments at the grassroots. I grew up in the sixties and seventies knowing about maternity centres. These centers cater for minor ailments unlike nowadays when people rush to Teaching Hospitals for minor health challenges that could be handled by maternity centers.

It is also desirable to have very robust National Health Insurance Scheme so that access to health services will be affordable.

To those criticising the reforms already introduced, they should rather join hands with this government so that we can move forward as a Nation.

It is in our collective interest for things to get better so that the generality of Nigerians will enjoy better living conditions.

There are sacrifices to be made on the path of the citizens, however, to compliment government efforts.

There must be deliberate efforts at reducing our high propensity to import.

It is unimaginable that we import common toothpicks and ziploc bags – items that we should be producing locally thus creating employment and generating wealth.

 If we reduce our desire for foreign goods and produce majority of what we consume, our country will be better for it.

Among the initiatives that can be immediately adopted to shore up inflow of foreign currency are the following:

• Stemming crude theft to ensure we move beyond the current 1million export level towards the 1.8 million OPEC allocation.

• Strategically up the ante with respect to other mineral resources in the extractive industry that abound all over the country presently dominated by artisanal miners.

•Unlocking the potential in our dead assets that have been estimated to be worth billions of dollars particularly in the oil and gas sector as well as abandoned real estates nationwide (The abandoned Former Ministry of defense building in Tafawa Balewa Square, Lagos readily comes to mind);

•Unlocking the estimated N7trillion potential in the marine economy.

Above all, it is important more attention is devoted to re-engineering the power sector because of its strategic importance to any form of development.

Finally, the security of the citizenry must be prioritized.

Without security, all other initiatives will just be wishful thinking.

Olayinka, an economist and member of the organised private sector, is a good governance advocate