How we plan to combat Nigeria’s economic challenges–Tinubu
...To fund 75 coys with N75b
.Sets aside N125bn for SMEs
Emeka Okoroanyanwu
President Bola Ahmed Tinubu, on Monday evening, unfurled wide ranging measures aimed at kicking the country’s economy out of the woods.
In his first broadcast to the nation since his inauguration on May 29, 2023, Tinubu gave reasons he removed subsidy on premium motor spirit and collapsed the exchange rates of the naira to other international currencies. He said his reason for removing subsidy on petrol was to save the trillions of naira paid out yearly to an elite cabal and invest it to critical sectors of the economy.
“It is important that you understand the reasons for the policy measures I have taken to combat the serious economic challenges this nation has long faced,” Tinubu said.
“For several years, I have consistently maintained the position that the fuel subsidy had to go. This once beneficial measure had outlived its usefulness. The subsidy cost us trillions of Naira yearly. Such a vast sum of money would have been better spent on public transportation, healthcare, schools, housing and even national security. Instead, it was being funneled into the deep pockets and lavish bank accounts of a select group of individuals.
“This group had amassed so much wealth and power that they became a serious threat to the fairness of our economy and the integrity of our democratic governance. To be blunt, Nigeria could never become the society it was intended to be as long as such small, powerful yet unelected groups hold enormous influence over our political economy and the institutions that govern it.
“The whims of the few should never hold dominant sway over the hopes and aspirations of the many. If we are to be a democracy, the people and not the power of money must be sovereign,” he bemoaned.
The President said removal of this once helpful device that had transformed into a millstone around the country’s neck had become inevitable.
On the multiple exchange rate system, he noted that it had became nothing but a highway of currency speculation, diverting money that should have been used to create jobs, build factories and businesses for millions of people.
“Our national wealth was doled on favourable terms to a handful of people who have been made filthy rich simply by moving money from one hand to another.”
This too, he said was extremely unfair.
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Tinubu noted that he had promised to reform the economy for the long-term good by fighting the major imbalances that had plagued the economy, adding that ending the subsidy and the preferential exchange rate system were key to the fight. The fight, he said was to define the fate and future of the nation.
According to him, the defects in the economy immensely profited a tiny elite, whom he referred to as “the elite of the elite.” He lamented that as he moves to fight the flaws in the economy, the people who grow rich from them, predictably, will fight back through every means necessary.
He acknowledged that the economy is going through a tough patch and people are being hurt by it.
“The cost of fuel has gone up. Food and other prices have followed it. Households and businesses struggle. Things seem anxious and uncertain. I understand the hardship you face. I wish there were other ways. But there is not. If there were, I would have taken that route as I came here to help not hurt the people and nation that I love.”
“What I can offer in the immediate is to reduce the burden our current economic situation has imposed on all of us, most especially on businesses, the working class and the most vulnerable among us.
He said the Federal Government is already working closely with states and local governments to implement interventions that will cushion the pains of our people across socio-economic brackets.
He recalled that earlier in the month, he signed four Executive Orders in keeping with his electoral promise to address unfriendly fiscal policies and multiple taxes that are stifling the business environment. These Executive Orders on suspension and deferred commencement of some taxes, he noted would provide the necessary buffers and headroom to businesses in the manufacturing sector to continue to thrive and expand.
To strengthen the manufacturing sector, increase its capacity to expand and create good paying jobs, the President announced a plan to spend N75 billion between July 2023 and March 2024.
“Our objective is to fund 75 enterprises with great potential to kick-start a sustainable economic growth, accelerate structural transformation and improve productivity. Each of the 75 manufacturing enterprises will be able to access N1 Billion credit at 9% per annum with maximum of 60 months repayment for long term loans and 12 months for working capital,” he said.
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“Our administration recognises the importance of micro, small and medium-sized enterprises and the informal sector as drivers of growth. We are going to energise this very important sector with N125 billion.
“Out of the sum, we will spend N50 billion on Conditional Grant to 1 million nano businesses between now and March 2024. Our target is to give N50,000 each to 1,300 nano business owners in each of the 774 local governments across the country.
“Ultimately, this programme will further drive financial inclusion by onboarding beneficiaries into the formal banking system. In like manner, we will fund 100,000 MSMEs and start-ups with N75 billion. Under this scheme, each enterprise promoter will be able to get between N500,000 to N1million at 9% interest per annum and a repayment period of 36 months.”
To further ensure that prices of food items remain affordable, Tinubu said the Federal Government has had a multi-stakeholder engagement with various farmers’ associations and operators within the agricultural value chain, noting that in the short and immediate terms, it will ensure staple foods are available and affordable.
And to this end, he said, he said the government has ordered the release of 200,000 Metric Tonnes of grains from strategic reserves to households across the 36 states and FCT to moderate prices. We are also providing 225,000 metric tonnes of fertilizer, seedlings and other inputs to farmers who are committed to our food security agenda.
The plan, he said, was to support cultivation of 500,000 hectares of farmland and all-year-round farming practice remains on course, adding that N200 billion out of the N500 billion approved by the National Assembly will be disbursed as follows: N50 billion each to cultivate 150,000 hectares of rice and maize, N50 billion each will also be earmarked to cultivate 100,000 hectares of wheat and cassava.
The expansive agricultural programme, he noted, will be implemented targeting small-holder farmers and leveraging large-scale private sector players in the agric business with strong performance record.
In this regard, he said the expertise of Development Finance Institutions, commercial banks and microfinance banks will be tapped into to develop a viable and an appropriate transaction structure for all stakeholders.
On the infrastructure fund, he said it was in the light of it that he approved the Infrastructure Support Fund for the States. The new Infrastructure Fund, he said would enable states to intervene and invest in critical areas and bring relief to many of the pain points as well as revamp our decaying healthcare and educational Infrastructure.
The fund, he noted, would also bring improvements to rural access roads to ease evacuation of farm produce to markets. With the fund, our states will become more competitive and on a stronger financial footing to deliver economic prosperity to Nigerians.
Part of our programme, the President said, was to roll out buses across the states and local governments for mass transit at a much more affordable rate, saying the Federal Government has made provision to invest N100 billion between now and March 2024 to acquire 3000 units of 20-seater CNG-fuelled buses.
The buses, he said, would be shared to major transportation companies in the states, using the intensity of travel per capital. Participating transport companies will be able to access credit under this facility at 9% per annum with 60 months repayment period.
In the same vein, the President said the government is also working in collaboration with the Labour unions to introduce a new national minimum wage for workers promising workers that a salary review is coming.
He said “Once we agree on the new minimum wage and general upward review, we will make budget provision for it for immediate implementation.”
The President urged Nigerians to look beyond the present temporary pains and aim at the larger picture as all good and helpful plans are in the works, affirming that they would work.
Tinubu regretted the unavoidable lag between subsidy removal and his plans coming fully online. He, however, promised to swiftly close the time gap, pleading that Nigerians’ should have faith in his ability to deliver and in their concerns for the peoples well-being.
The President said the country would get out of the turbulence, assuring that Nigeria will be better equipped and able to take advantage of the future that awaits her.
Tinubu said, “In a little over two months, we have saved over a trillion Naira that would have been squandered on the unproductive fuel subsidy which only benefitted smugglers and fraudsters. That money will now be used more directly and more beneficially for you and your families.”
He promised to fulfill administration’s promise to make education more affordable to all and provide loans to higher education students who may need them, saying that no Nigerian student will have to abandon his or her education because of lack of money.
“Our commitment is to promote the greatest good for the greatest number of our people. On this principle, we shall never falter.
“We are also monitoring the effects of the exchange rate and inflation on gasoline prices. If and when necessary, we will intervene.
“I assure you my fellow country men and women that we are exiting the darkness to enter a new and glorious dawn,” the President promised.
