- President Tinubu, in his national broadcast to mark Nigeria’s 64th independence anniversary, noted the achievements of his administration in 16 months
- These achievements include eight that focus on the economy
- TheRadar highlighted these economy-focused achievements including attracting $30 billion FDI, forex stabilisation efforts, among others
During a national broadcast on the 64th independence anniversary of Nigeria on Tuesday, October 1, President Bola Tinubu reeled out the achievements of his 16-month-old administration.
Among the achievements, eight focused on the economy and government policies' impact on repositioning the economy.
The economy-focused points from the president’s speech as highlighted by TheRadar include:
1. $30 billion in foreign direct investments in one year
In his speech, President Tinubu said the reforms adopted by his administration to correct fiscal misalignments attracted foreign direct investments (FDIs) of over $30 billion in just one year.
He said, “The economy is undergoing the necessary reforms and retooling to serve us better and more sustainably. If we do not correct the fiscal misalignments that led to the current economic downturn, our country will face an uncertain future and the peril of unimaginable consequences.
“Thanks to the reforms, our country attracted foreign direct investments worth more than $30 billion in the last year.”
2. ExxonMobil-Seplat divestment to receive speedy ministerial approval
The settlement for the divestment of ExonnMobil’s stake in Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy Plc, which was signed in May 2024 by the Nigeria National Petroleum Company Limited (NNPCL), also featured in the president’s speech.
He said the divestment will receive speedy ministerial approval having been concluded by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) as the regulator, in line with the Petroleum Industry Act (PIA).
The president noted that this will create vibrancy in the sector and increase oil and gas production.
He said, “Fellow compatriots, our administration is committed to free enterprise, free entry and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively.
“As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.
“The move will create vibrancy and increase oil and gas production, positively impacting our economy.”
Recall that in February 2022, Seplat announced an agreement to acquire ExxonMobil’s 40 per cent stake in MPNU. The proposed acquisition was, however, declined by the NUPRC due to “overriding national interest.”
3. CBN policies have ensured FX market’s stability, predictability
President Tinubu also mentioned that the policies adopted by the Central Bank of Nigeria (CBN) have ensured stability and predictability of the foreign exchange (forex) market.
“The more disciplined approach adopted by the Central Bank to monetary policy management has ensured stability and predictability in our foreign exchange market,” he said.
The president’s statement on CBN’s policies reechoes the stance of the CBN governor, Olayemi Cardoso, who said the apex bank’s policies like interest rate hikes and granting International Money Transfer Operators (IMTOs) access to source naira directly from the CBN helped increase remittance inflows and slowed down inflation.
At the Monetary Policy Committee (MPC) meeting held in July, Cardoso said the MPC is concerned with stemming inflation and forex stability, which explains its stringent monetary tightening stance.
He said, “Two areas that pose a challenge are food inflation and foreign exchange. The MPC noticed the moves by the fiscal side taking certain policies that help to moderate food inflation and we are hopeful and encouraged.
“On the foreign exchange, we have seen positive outcomes from the tools that we have been using over the recent past. For example, the exchange rate has converged, limiting the opportunities for arbitrage.”
4. Cleared inherited $7bn forex backlog
Another key economic point in the President’s Independence Day anniversary national broadcast is the clearing of the inherited $7 billion forex backlog.
He said, “We inherited a reserve of over $33 billion 16 months ago. Since then, we have paid back the inherited forex backlog of $7 billion.”
The clearing of $7 billion valid backlogs of forex transactions on March 20, according to the CBN, is to ensure forex liquidity and stabilise the exchange rate, thereby curbing imported inflation and spurring confidence in the banking system and the economy.
Stressing the need to clear the backlog, Cardoso said, “We needed to go through an independent and credible process that would determine the authenticity of those obligations and, at this point, I can tell you that we have now cleared all genuine, verifiable transactions. This encumbrance to market confidence in the country’s ability to meet its obligations is now totally behind us.”
5. Cleared N30 trillion Ways and Means debt
President Tinubu also stated that his administration cleared N30 trillion Ways and Means debt owed to the CBN within 16 months.
Ways and Means are adopted by governments whereby debts are incurred by borrowing funds from central banks to address budget shortfalls.
The Federal Government’s Ways and Means owed the CBN is said to have ballooned from N869 billion to N23.7 trillion under President Muhammadu Buhari.
In May 2023, the National Assembly approved President Buhari’s request to securitise N7.3 trillion of the outstanding debt, representing interest accumulated on the N22.7 trillion debt.
The secrutisation, as gazetted by the Debt Management Office (DMO), involves the issuance of debt securities with a 40-year tenor by the Federal Government to the CBN, with an interest rate of nine per cent per annum, a three-year moratorium on principal repayments and will add the Ways and Means advances to the public debt balance.
6. Reduced debt service ratio
In the national broadcast, President Tinubu also stated that his administration has “reduced the debt service ratio from 97 per cent to 68 per cent.”
This was also stated by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, in July 2024.
He said the decline of Nigeria’s revenue to debt service ratio from 97 per cent in 2023 to 68 per cent in 2024 indicated a reduction in the debt burden of the government and the country’s revenue being managed in a way that promotes transparency, accountability and visibility of government spending.
In the first quarter (Q1) of 2024, the cost of servicing debt gulped about 74 per cent of the Federal Government’s revenue, which is N1.31 trillion out of the N1.76 trillion retained revenue.
7. Foreign reserves at $37 billion
Foreign reserves, which increased to $37 billion as of September 19, is another point noted by President Tinubu in his broadcast. “Despite all these, we have managed to keep our foreign reserve at $37 billion. We continue to meet all our obligations and pay our bills, he said.
At a press briefing at the end of the 297th MPC meeting in Abuja on September 24, Cardoso said the external reserves stood at $39.07 billion.
He said, “The external reserve stood at $39.07 billion as of September 19, 2024, an increase of 17.4 per cent compared with $33.28 billion in the corresponding period of 2023. This represents eight months of import cover for goods and services and 13 months of imports of goods only.”
8. Economic Stabilisation Bill to be transmitted to NASS
The President also stated of the administration’s resolve to go ahead with its fiscal policy reforms, especially with the Federal Executive Council’s approval of the Economic Stabilisation Bill.
He added that the reforms would engender economic prosperity through the creation of jobs and ensuring a friendly business environment, among others.
“We are moving ahead with our fiscal policy reforms. To stimulate our productive capacity and create more jobs and prosperity, the Federal Executive Council approved the Economic Stabilisation Bills, which will now be transmitted to the National Assembly.
“These transformative bills will make our business environment more friendly, stimulate investment and reduce the tax burden on businesses and workers once they are passed into law,” he said.
Independence Day Speech: Nigerians criticise Tinubu for “light at the end of the tunnel” comment
President Bola Tinubu has come under fire on social media for telling Nigerians that his administration is beginning to see the light at the end of the tunnel as the reforms he is implementing are showing positive signs.
He said this while addressing Nigerians in the early hours of Tuesday, October, to mark the 64th anniversary of Nigeria’s independence.
