On Sunday, the Presidency responded to a critical New York Times article about Nigeria’s economic situation, labelling it as misleading and biased. This rebuttal was detailed in a statement by Bayo Onanuga, the Special Adviser to the President on Information and Strategy.
The New York Times feature, written by Ruth Maclean and Ismail Auwal, titled “Nigeria Confronts Its Worst Economic Crisis in a Generation,” was published on June 11. Onanuga criticized the piece for its “predetermined, reductionist, derogatory, and denigrating” portrayal of African countries.
Onanuga asserted that the article misrepresented the economic policies of President Bola Tinubu’s administration, which assumed office in late May 2023. He argued that the report unfairly attributed the nation’s economic woes to the new administration while ignoring positive developments and policies being implemented at both the central and state levels.
He emphasized that Tinubu inherited significant economic challenges, not of his own making. “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 a collapse similar to what happened in Zimbabwe and Venezuela,” Onanuga stated.
Onanuga outlined the severe economic issues Tinubu faced upon taking office. For decades, Nigeria maintained a fuel subsidy regime that cost $84.39 billion from 2005 to 2022, amidst significant infrastructural deficits and a need for improved social services. Additionally, the state oil firm, NNPCL, had accrued trillions of Naira in debts due to unsustainable subsidy payments.
The previous government planned to spend 97% of revenue servicing debt, leaving minimal funds for recurrent or capital expenditure. Massive borrowing was necessary to cover these costs. Onanuga also noted that the government subsidized the exchange rate, spending approximately $1.5 billion monthly to defend the currency, which led to significant arbitrage opportunities and a dried-up foreign direct investment.
Addressing the current economic situation, Onanuga mentioned that despite initial turbulence, some stability has returned to the Naira, which had previously plummeted to as low as N1,900 to the US dollar. The exchange rate has since improved to below N1,500 to the dollar, with hopes of further appreciation.
He highlighted that Nigeria recorded a trade surplus of N6.52 trillion in Q1, a significant turnaround from a deficit of N1.4 trillion in Q4 of 2023. The economic reforms have restored investor confidence, leading to increased portfolio investments and loans from international financial institutions like the World Bank, AfDB, and Afreximbank.
Onanuga also pointed out that inflation rates, especially food inflation, remain a challenge. However, the government is working hard to increase agricultural production and reduce food costs. Initiatives include dry-season farming incentives, substantial fertilizer donations from the CBN, and significant agricultural investments by state governments.
He stressed that Nigeria is not alone in facing a rising cost of living crisis, with similar issues affecting the USA and Europe. Onanuga expressed confidence that Nigeria would overcome its current economic difficulties, drawing parallels to past challenges that the nation has successfully navigated.
In conclusion, Onanuga reiterated that the Tinubu administration is committed to tackling these economic challenges head-on, working towards a more stable and prosperous Nigeria.
