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Monday, December 11, 2023

Navigating economic policy: Lessons from Tinubu’s missteps

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By Abdulrauf Aliyu

In the realm of governance, as in life, a compass can guide one’s direction, but it offers little insight into the obstacles that lie ahead. This truth is articulated by the quote, “[A] compass… [will] point you true north from where you’re standing, but it’s got no advice about the swamps, deserts, and chasms that you’ll encounter along the way. If, in pursuit of your destination, you plunge ahead, heedless of obstacles, and achieve nothing more than to sink in a swamp, then what’s the use of knowing true north?” rings particularly pertinent in the context of President Tinubu’s economic policy decisions.

President Tinubu’s recent measures to remove the petrol subsidy and float the naira in order to unify the exchange rate were ostensibly driven by a desire to align Nigeria’s economic trajectory with global norms and fiscal prudence. However, in the complex terrain of economic policy-making, merely following a compass pointing to “true north” is not sufficient. One must also consider the swamps, deserts, and chasms that may lurk along the path.

John Lewis Gaddis, a renowned historian and strategist, emphasized the importance of aligning aspirations with capabilities. He astutely noted, “If you seek ends beyond your means, then sooner or later you’ll have to scale back your ends to fit your means.” This wisdom underscores the significance of assessing a nation’s resources, capacities, and socio-political context before embarking on ambitious policy changes. In Nigeria’s case, the removal of the petrol subsidy and the floating of the naira were pursued with potentially unlimited aspirations, but they collided with the nation’s necessarily limited capabilities.

The removal of the gasoline subsidy, though touted as a move towards fiscal responsibility, unleashed a wave of hardships on ordinary citizens. The sudden surge in fuel prices rippled through the economy, escalating the cost of living and stoking public discontent. The lack of adequate safety nets or alternative strategies left many stranded in the metaphorical economic swamp, struggling to stay afloat amid rising prices and diminishing purchasing power. This demonstrates the danger of pursuing policy goals without a comprehensive understanding of the real-life consequences they entail.

Similarly, the decision to float the naira in pursuit of exchange rate unification had unintended consequences. While this move aimed to present a united front to the international market, it neglected the fact that Nigeria’s economic landscape is riddled with pitfalls, such as inflationary pressures and vulnerabilities in key sectors. The swift depreciation of the naira exposed these weaknesses and highlighted the importance of a balanced strategy that considers both the overarching goal and the immediate reality.

Gaddis further asserted that a strategy emerges when one connects the dots between current circumstances and intended objectives within the context of the situation at hand. President Tinubu’s economic policies, however well-intentioned, seem to have overlooked this crucial step. A comprehensive strategy should account for the diverse economic and social landscape of Nigeria, acknowledging the limitations of the nation’s capabilities while charting a path toward achievable, equitable, and sustainable growth.

In the end, the lessons from President Tinubu’s economic policy missteps serve as a cautionary tale for leaders worldwide. A compass may point true north, but it is a balanced and well-informed strategy that guides a nation safely through the swamps, deserts, and chasms that lie on the journey toward prosperity. To align potentially unlimited aspirations with necessarily limited capabilities, as Gaddis wisely stated, is to bridge the gap between the real and the imagined and to plot a course that safeguards the well-being of a nation’s citizens while fostering its growth.

Abdulrauf Aliyu
An economist and Policy Analyst writes from
45 Ashiru Road, U/Dosa New Extension

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