Leader of the Social Democratic Party (SDP) and the party’s presidential candidate in the 2023 election, Prince Adewole Adebayo, has said that the much-celebrated economic stability under President Bola Tinubu-led All Progressives Congress (APC) is a ruse.
He stated that the report that inflation has dropped to 20.7 percent, which the government has been celebrating, is actually a slap on Nigerians because all across Africa, the inflation rate does not exceed five percent.
He cited countries like Benin Republic with less than two percent inflation figure, Senegal with less than three percent, Tanzania at 3.3 percent as well as South Africa and Morocco with less than five percent inflation figures respectively among other African countries, stressing that Nigeria needs to come down to about seven percent before anybody can talk about economic recovery.
He, however, agreed that the situation is slightly better than what it was last year but comparing it with what obtains in other African countries, Nigeria still has a long way to go.
He said, “In a way, the economy, in terms of these numbers, is not worse now than it was last year. It’s slightly better but far, far away from where it ought to be. And if you look at the inflation numbers across some regions for example, I don’t want to sound like I’m mentioning America, as they’ll say, ‘Oh, that’s a different place,’ we are the fourth highest in inflation. Benin Republic, next to us, has inflation barely above one percent. If you go around the ECOWAS countries, the countries that use CFA, the highest is Senegal because of its high borrowing.
“But all the countries around us are at two percent and 2.7 percent. Even Tanzania, whose economy is beginning to resemble ours in some ways, if you look at the exchange rate and other factors, Tanzania is barely 3.3 percent in inflation. So, there is no major country, South Africa, our competitor, Morocco, none of them is up to five percent in inflation.
“We are still at 20.7 percent. So, we need to get as low as seven percent before we start to look at recovery from the point of view of inflation. It’s a good number, a better number than before, but it’s not a number that’s going to take you to the Promised Land.”
He called on the Federal Government to focus more on the real economy by developing infrastructure and creating employment. He referred to the International Monetary Fund’s (IMF) report to drive home his point, saying: “If you study the IMF reports, despite all the numbers they’re juggling, there’s a report where they concluded that Nigeria’s inflation has been driven by poor infrastructure.
“So, if we improve infrastructure, transport costs will be cheaper, which will impact food, productivity, and the disposable income left for people, and that will also cushion the effect of the poverty of wages we have in the country. So, the country needs to look at infrastructure and agriculture.”
He equally projected that if the government continues in the manner it is going at present, Naira might likely fall to about N1, 430 by Christmas, but stressed that will still not bring about a strong economy. “That still doesn’t make you a strong economy; it only means that people can plan. People will not be holding dollars anymore. People will not be in a hurry to start bidding for money they don’t need in fear that it might rise,” he stated.
Responding to a recent comment by former Speaker of the House of Representatives, Yakubu Dogara, that President Tinubu inherited a dead economy, he said: “I commend Dogara for speaking adequately for his party and his people, but I think we should be more realistic in terms of the real economy to grow employment, agriculture and infrastructure. That requires time and consistency.”
He agreed that the economy the economy late President Muhammadu Buhari left was a poorly managed one but lamented that President Tinubu has not done much to change the situation.
He likened the situation to an emergency room patient, saying, “As an emergency room patient, your road to recovery depends on a good diagnosis by the doctor. If the doctor is able to know the reason you are ill, he will be able to put you on a solid path to recovery.
“What President Tinubu has done is to stabilise the patient, but I’m not so sure he has managed to identify the ailment. So, the patient is not going to die immediately, but he hasn’t found a cure.
“He hasn’t been able to identify the problem, the ailment that is disturbing the patient, but as an emergency room doctor, he has taken some steps. Some of the steps actually aggravated the case of the patient, but over time, he appears to have one or two wins in two sectors, which is why people could be deceived into thinking that the patient is on the road to recovery.
“One, Tinubu has managed to get more revenue, at least in nominal terms, and the domestic borrowing that was a feature of President Buhari’s public finance has reduced. So, he has managed to get some revenues in but because of other wrong policies, that money he has gotten, in real terms, will not be able to finance a lot of government spending and infrastructure. However, in terms of balance sheet, Tinubu has managed to have a better balance sheet than what Buhari left for him.
“The second thing that helped them, which we’ll know in the long run whether it’s really a good thing to do, was that they rebased inflation. So, they started counting inflation differently. If they say inflation has dropped to about 20.7 percent now from 21.7 percent last month, it’s not because the economy is performing better but because the counting has changed.
“The third thing that has worked for them is the relative fall in food inflation. Food inflation has dropped, and food inflation is a major component of the inflation basket. Since the prices of foodstuffs have come down a lot, it’s not that those at home are going to feel it because it hasn’t dropped to the level where they can feel it, but it has dropped in the numbers.
“So, it’s like you trying to catch a bag of rice that is placed 10 feet above you. Your hand cannot reach it, and if you drop it to eight feet, your hand still cannot reach it, but it’s lower than before. That’s how it is.”
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