Revisiting the Renewed Hope Agenda, By Mahmud Shuaibu Ringim
NEWS DIGEST – The Tinubu administration’s tax increases amid the country’s hyperinflation are counterproductive and detrimental to economic recovery. This approach starkly contrasts with President H.W. Bush’s famous “Read my lips: no new taxes” pledge and British Prime Minister Margaret Thatcher’s assertion that no country prospers by overtaxing its citizens.
The recent increase in electricity tariffs for large consumers and the hike in VAT will ultimately raise the prices of goods for final consumers, reducing their purchasing power. Although the sudden reversal of the cybersecurity levy on financial transactions has averted significant financial disruption, the overall tax policy remains problematic.
In his inaugural address, President Tinubu made an abrupt and unplanned withdrawal of the subsidy on PMS, causing a severe economic downturn. This, coupled with the devaluation of the Naira against the US Dollar, has led to skyrocketing prices of goods and services in an import-dependent economy.
The recent recapitalization of banks to a maximum of N500 billion for mega banks and N200 billion for specialized banks signals a troubled money market, potentially leading to adverse effects on the capital market and the economy. The scarcity of surplus funds for savings and investment and the prohibitive cost of funds for small and medium enterprises are significant concerns.
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While the Buhari administration handed over a fragile economy with many underlying issues and a high debt profile, Nigerians expected the Renewed Hope Agenda to correct these wrongs rather than continue the hardships. The government should support the Dangote Refinery to reduce foreign exchange expenditures on imported refined petroleum products, thus boosting Nigeria’s foreign reserves and strengthening the Naira.
The government should also establish an industrial resuscitation fund to finance the revival of closed and moribund industries, which are widespread across the country. This move would help reduce unemployment, create jobs, and generate wealth for citizens.
Export policies should focus on value-added agricultural products to promote re-industrialization. Furthermore, rail transportation should be prioritized for its cost-effectiveness and economic benefits.
Ugandan President Yoweri Museveni has emphasized the importance of African countries looking inward for industrialization, leveraging their abundant resources. Nigeria, rich in resources, should not import ceramic sanitary wares, tiles, shoes, bags, edible oils, or textile fabrics when it can produce these items domestically.
The government should seek investors to revitalize privatized manufacturing companies that have failed to meet privatization terms, similar to actions taken with DISCOS in the power sector. Additionally, joining BRICS could enable Nigeria to actively participate in the new world order and reassess its relationships with Bretton Woods institutions, offering more advantages than disadvantages.
The Tinubu administration must revisit the Renewed Hope Agenda with a focus on manufacturing as the engine of economic growth and prosperity. This should include tax incentives and supportive policies to attract potential investors, ensuring the agenda has a human face and aligns with the country’s economic needs.
Mahmud Shuaibu Ringim
HALIM Consulting Ltd
mahmudshuaibu44@gmail.com
