Tinubu’s economic reforms may be faltering - Financial Times

London-based Financial Times publication has noted in an editorial that there are signs of President Tinubu’s economic reforms going not as planned, as the publication also noted that although President Tinubu started with a bang by removing fuel subsidies and moving towards a market-driven exchange, events in the past four months show that more work has to be done.

It stated: “In removing a costly fuel subsidy and in shifting towards a market-driven exchange rate, which has sharply weakened a previously overvalued currency, he has gone some way towards persuading investors he is serious about reform. But four months into his presidency, there are signs of things going awry,”

Removal of Godwin Emefiele

Going further, the report noted that the removal of Mr Godwin Emefiele, the former Governor of the Central Bank of Nigeria (CBN), raised eyebrows due to its unconventional nature, giving the impression of political reprisal.

Initially, Emefiele had been apprehended on charges related to the alleged unlawful possession of firearms.

The report said: “The removal of Godwin Emefiele, the previous governor, was overdue. But its manner, initially via a charge of firearms possession, was odd and smacked of political revenge. More substantively, the new exchange rate regime has yet to be properly explained,”

New CBN leadership

On the new exchange rate regime and how the new CBN management can stabilize the financial system, it said the new CBN leadership will most likely increase the interest rates to curb inflation but opined that President Tinubu must guarantee the independence of the institution.

In their words: “Markets consider Cardoso, a former Citibank Nigeria chair, to be a sound appointment. (The same cannot be said of all of Tinubu’s picks.) The incoming governor will probably need to raise rates at the next policy meeting to establish his inflation-busting credentials. Tinubu must restore institutional independence by leaving the bank to get on with its job. In other areas, the president needs to be more active – and more articulate.”

Tinubu needs to gain momentum

It further noted the new administration risks losing out on the gains of its earlier reforms and advised the President needs to properly explain his policies before announcing them.

It used the restoration of democracy as an example.

It stated: “Only four months into his presidency, what started with a bang risks becoming a whimper. Tinubu needs to regain the momentum.”