The president sharply criticizes the New York Time report, claiming that Tinubu inherited a dead economy

The Presidency has addressed the New York Times over its report on the current situation in Nigeria, stating that on May 29, 2023, President Bola Tinubu inherited a dead economy.

The Presidency also justified some of the policy decisions taken by the Tinubu administration, such as the abolition of the naira exchange rate and the removal of fuel subsidies, declaring that these policies were in the best interest of the country.

In a statement titled “A rejoinder to the yellowish New York Times report on Nigeria’s current economic situation”, issued on Sunday by the Special Adviser to the President on Information and Strategy, Bayo Onanuga, the Presidency said Nigeria is not the only country in the world facing face the growing cost of living crisis.

The statement reads: “Ruth Maclean and Ismail Auwal’s article titled ‘Nigeria Faces Worst Economic Crisis in a Generation’, published on June 11, reflects the typical predetermined, reductionist, derogatory and denigration way in which foreign media have been covering African countries for several decades .

“Due to the misleading nature of the report, we need to clear up some misconceptions conveyed by reporters about the economic policies of the Tinubu administration that came to power in late May 2023.

“What was most significant about the report was that it outlined the tragic experiences of some Nigerians amid the inflationary spiral that occurred last year and blamed it all on the policies of the new administration.

“The report, based on several interviews, is jaundiced at best, full of gloom and doom, as it never mentioned the positive aspects of the same economy, nor the easing policies being implemented by the central and state governments.”

The Presidency said the country’s economy had been bleeding since Tinubu took over and urgent measures were needed to restore it.

It said: “Of course, President Tinubu did not create the economic problems Nigeria is currently facing. He inherited them. As a respected economist in our country once put it, Tinubu has inherited a dead economy. The economy was bleeding and needed quick surgery to avoid falling into the abyss as happened in Zimbabwe and Venezuela.

“This was the background to the policy direction chosen by the government at the turn of May and June 2023: repealing the fuel subsidy system and unifying many exchange rates.

“For decades, Nigeria has maintained a fuel subsidy system that has drained $84.39 billion of public treasury between 2005 and 2022 in a country with massive infrastructure deficits and a dire need for better social services for its citizens.

“State oil company NNPC, the sole importer, has accumulated debts of trillions of naira for absorbing unsustainable subsidy payments on its books. By the time President Tinubu took over the leadership of the country, there were no longer any provisions in the national budget for the payment of fuel subsidies after June 2023.

“The budget itself had a striking feature: it planned to allocate 97 percent of revenues to debt service, leaving little for recurrent or capital expenditure. To cover such costs, the previous government resorted to massive borrowing.

“Like crude oil, the exchange rate was also subsidized by the government, with the CBN spending about $1.5 billion a month to “defend” the currency against the unquenchable demand for the dollar from the country’s import-dependent economy.

“By keeping the rate low, arbitrage increased as there was a discrepancy between the official rate and the rate used by over 5,000 BDCs that were previously licensed by the Central Bank. Moreover, the country has defaulted on its remittance obligations to airlines and other foreign companies, with the result that FDI and investment in the oil sector has stopped, and Emirate Airlines in particular has cut off its route to Nigeria.

“President Tinubu had to deal with the cancer of public finances on day one by withdrawing the subsidy system and largesse that had spread to neighboring countries. Then his administration released the naira.
While admitting that the exchange rate had reached its worst level, he said it was gradually regaining some level of stability.

The Presidency said: “After several months of storm, where the naira fell to N1,900 against the US dollar, some stability is being restored, although some challenges remain. The exchange rate is currently below N1,500 against the dollar and there are prospects of the naira regaining strength and strengthening to between N1,000 and N1,200 before the end of the year.

“The economy posted a trade surplus of $6.52 trillion in the first quarter compared with a deficit of $1.4 trillion in the fourth quarter of 2023. Portfolio investors started arriving as long-term investors.

“When Diageo wanted to sell its stake in Guinness Nigeria, it had Singaporean conglomerate Tolaram to take over. With the World Bank’s $2.25 billion loan and the advent of other loans from AfDB and Afreximbank, Nigeria has once again become bankable. All because the implemented reforms restored self-confidence.

“The pace of inflation is slowing down, as shown by April data from the Central Statistical Office. Food inflation remains the biggest challenge and the government is working very hard to contain it through increased agricultural production.

“The Tinubu administration and the 36 states are working assiduously to produce food in large quantities to reduce costs. Governments in some states, such as Lagos and Akwa Ibom, have set up retail stores where they sell raw food to residents at a price lower than the market price.

“Last November, the Tinubu government, in line with its food emergency declaration, invested heavily in dry season agriculture, encouraging farmers to produce wheat, maize and rice. The CBN has distributed fertilizers worth N100 billion to farmers and numerous incentives are being implemented. In western Nigeria, six governors have announced plans to massively invest in agriculture.”

The Presidency noted that once all plans are implemented, inflation, especially food price inflation, will soon be suppressed.

It stated: “Nigeria is not the only country in the world struggling with a growing cost of living crisis. The United States is also facing a similar crisis, and families are finding it difficult to make ends meet. US Treasury Secretary Janet Yellen recently expressed this concern. Europe is similarly experiencing a cost of living crisis.

“While these countries are trying to tackle the problem, the Tinubu administration is also working hard to overcome the economic problems in Nigeria.

“Our country has faced economic difficulties in the past, which has been immortalized in folk songs. Just as we overcame then, we will soon overcome our present difficulties.