PRESIDENT Bola Tinubu deserves some flowers for putting policies in place to stabilise the naira and liberalise the downstream petroleum sector. Today, petrol queues have vanished across Nigeria’s fuel stations, and no cabal is milking the nation’s resources by presenting fake documents to steal subsidy funds. Besides, investors are now more confident in the economy on the back of a predictable currency and a transparent market.
However, his policies have raised the cost of living and deepened poverty. Economy Post‘s Postlytics has four charts that prove the impact of these policies on Nigerians.
First is the value of Nigeria’s minimum wage, which has declined in dollar terms. Under President Olusegun Obasanjo’s government (1999-2007), the minimum wage was N7,500 for federal workers. At that time, the average exchange rate stood at N86/$, placing the minimum wage at $87. Under President Musa Yar’Adua, however, the minimum wage stood at N18,000 while the average exchange rate was N140/$. This puts the minimum wage at $128.6.
Sources: CBN, BDCs, Postlytics
Under President Goodluck Jonathan, the minimum wage stood at N18,000 while the average exchange rate was N173.5, placing the dollar value of the wage at $103.7. President Muhammadu Buhari maintained the minimum wage at N30,000 until July 2024 when he raised it to N70,000. So, for much of President Buhari’s 8-year administration, the minimum wage stood at N30,000.
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Under Buhari, there were multiple exchange rate markets, but our analysts found the average rate as N358/$. With 30,000 minimum wage, the dollar value of the wage stood at $83.7. Under President Tinubu, however, the minimum wage has stood at N70,000, but average exchange rate since May 2023 is N1,075/$, putting the dollar value of the wage at $65.1.
Sources: CBN, NBS, World Bank, Macrotrends, Postlytics/Economy Post
Secondly, the cost of living or inflation has been very high under President Tinubu. Under Obasanjo, the average inflation rate stood at 11.75 percent, which declined to 10.68 percent under Yar’Adua. It fell further to 10.37 percent under President Jonathan, but skyrocketed to 15.1 percent under President Buhari. So far, under President Tinubu, inflation has averaged 28.96 percent despite the change of metrics which brought down inflation numbers late last year.
READ ALSO: Stats show Tinubu’s economic reforms favour the rich but leave the poor behind
However, there is a caveat. President Tinubu has stayed in office for just two years, with his predecessors spending more time in government. Hence, though his numbers are high, they would eventually be low if placed on equal pedestal with his seniors’. But his numbers may be the highest, nevertheless.
Source: NBS, CBN, World Bank, IMF, Postylytics/Economy Post, FOA
Another indication that life is tougher under President is the cost of food items from rice to beans. The average food inflation, which captures the cost of food over time, stood at 14.1 percent under President Obasanjo, dropping to 13 percent under President Yar’Adua, and falling further to 11 percent under President Jonathan. Food inflation, however, rose to 17 percent under President Buhari and has further skyrocketed to 29 percent under President Tinubu.
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ChatGPT projects that President Tinubu’s food inflation will average 22 percent to 28 percent if the present conditions persist. Currently, the average cost of 50kg bag of rice is N70,000 to N90,000 as against N2,500 in 1999, N4,000 in 2004, N9000 in 2015, and N32,000 in 2021.
More so, Nigeria is now more indebted under President Tinubu than all the 4 past presidents combined. From Obasanjo to Jonathan, Nigeria’s debt was less than N15 trillion. President Buhari borrowed N75.26 trillion in his 8 years in office. However, President Tinubu’s net loans stand at N93.5 trillion.
What this means is that a lot of resources that should have been used to provide infrastructure and welfare facilities for Nigeria’s over 200 million people will now be deployed to repaying debts under President Tinubu. President Tinubu’s administration is raising the nation’s debt profile as most of his loans are external in nature.
Borrowing more in foreign currency is one reason why President Tinubu’s debt is rising faster than that of his predecessor in naira terms. The naira has devalued by over 50 percent since Mr Buhari left office.
“When you hear from President Tinubu that he has met his revenue target without borrowing one kobo from local banks, he means that he prefers borrowing from international institutions. The question is this, why are you borrowing heavily externally when you have met your revenue target?” asked a United Kingdom-based finance lecturer, Dr Matthew Onyemaechi.
