Experts, Obi Fault Tinubu on Economic Stability Claim
Financial experts have challenged President Bola Tinubu’s assertion that Nigeria’s economy has stabilised and that the country has stopped domestic borrowing, arguing that available indicators do not fully support his position.
Similarly, the Presidential candidate of the Labour Party in 2023, Mr. Peter Obi also differed with the president over his recent comments.
Reacting to the President’s comment on his X handle, Obi said true economic stability is not only in numbers.
“The President has announced that our nation’s revenue target for the year has now been achieved by August, which could mean a stabilising economy.
“Congratulations Mr. President. But Mr. President, if indeed the economy stabilises as you declared, then Nigerians must feel it in their daily lives. Borrowings must stop now. Huge Contractors’ bills, which are still owed should be paid, and critical underfunded projects must now be funded.
“Our educational facilities and hospitals are still in terrible condition. True economic stability is not in figures announced at press conferences, but in classrooms where children learn, in well-equipped labs and access to learning tools, in hospitals, where citizens can receive quality care, equipped with adequate facilities.
“For the next four months, every value of our excess revenue should be deliberately channelled into the critical areas of development: health, education, and pulling people out of poverty. This must be done transparently, with verifiable and measurable outcomes. Anything less will mean that revenue growth has not translated into national growth. Nigerians deserve to see the impacts of this touted revenue growth,” Obi said
Experts react
Also reacting, senior partner at SPM professionals, Dr. Paul Alaje said for the President to make such comments, he might have numbers that have not been made public, but admitted that revenues have increased.
“As watchers of the economy, it will be dangerous for us to say he has said the truth, or he has not said the truth. What we need to do is to perhaps wait, with the help of statistics, the Central Bank of Nigeria, will make their releases. But as of today, the available number is showing that, yes, revenue has grown within the reality of evaluation policy, which of course has aided revenue growth.
“And also, there is a lot of energy on the part of the FIRS, which has indeed helped in boosting revenue. And one would agree that truly, FIRS has really, really boosted all kinds of revenue collection. And if you remember that the president also mentioned that his administration makes this targets revenue from non-revenue, non-oil,” he said.
Speaking further on borrowing, he said, “So to my mind, we need to look at what we projected, what we plan to borrow from 2025. And if the president said we have met it, I am wondering, the proposal before the Senate, if that is still obtainable. Just recently the Senate looked at borrowing proposals brought by the executive, that’s Mr. President, for 2025.
“So if we have met our revenue target and we are around August and we are just starting September, the good news will be that we still have a whole quarter clearance which means we might increase our revenue target by nearly 30 per cent.
“But you know, as economists, what is pivotal to us is to now see this number reflect. But as I speak to you today, you know that the word of president, in any nation, is a very powerful word. And presidents generally don’t speak carelessly.
“So I want to take this as one of those words that are really, indeed, very powerful. But you know, as a researcher, we need to wait until the numbers are made official. Again, the atmosphere with which the president said this, he was speaking with politicians. I understand that those were members of the defunct CPC. And as economists, it’s important for us to look critically at the numbers before we are sure whether it is true or otherwise.
‘Nigeria still borrowing’
“The truth is that we are actually borrowing. Any time the central bank raises bills and bonds, they are borrowing. So when you say a central bank is raising bills and bonds, our banks are buying these bills and bonds directly.
“So what you see, I am now going technical. In order not to discredit the word of the president, the number one citizen of Nigeria, you know, it’s also good to provide context. So the president may be talking about maybe the federal government going to the banks, commercial banks this time to borrow money. Of course, the government has its own bank, which is the Central Bank, which can also lend against expected inflow into the government. But state government before now will naturally go to those commercial banks to borrow money,” he further explained.
Dr. Alaje further stated the president might have also hinted that “we might be borrowing but we are not borrowing locally, because he said we are not borrowing from local banks.”
“And if you look at what was read before Senate, they were mentioning foreign loans. Even though I had warned before now that we should be wary on foreign loans,” he added.
Dr. Marcel Okeke, another economist said the president’s claim of stabilising the economy is the “joke of the year.”
He said, “If you look at that occasion where he was addressing people, he was saying Nigeria was no longer borrowing domestically, that is not true. Check the Debt Management Office (DMO) or Central Bank of Nigeria, they are still in the process of borrowing either through Open Market Operation (OMO) or through some bonds.
“There are still discussions on loans ongoing. That statement he made about meeting the revenue target in August, this kind of thing has never happened in this economy at any point in time that the revenue target for 12 months has been made in the eighth month of the year, is that true? Are we talking about magic?”
Okeke stated that contrary to the President’s claim, meeting revenue target is not reflective of the current reality.
He said, “If you check now, the government is still battling with paying salaries of some civil servants or pensioners and you are talking about meeting the revenue target.
“There is a lot of doubt about what the President said because it doesn’t align with the reality on ground. He is the President and we can’t write him off like that. On one hand, congratulations and on the other hand, your statement is doubtful.”
He also added that the naira has never come below N1,500. For him to say, N1,450 is also not true. Again in the two-year period, the exchange rate moved from around N450 and moved to N1,900 before it started coming down.”
Providing context on economic stability, a development economist, Joseph Momoh stated that most times Nigeria uses only GDP for growth, forgetting other parameters.
“There are alot of parameters that define an economy like inflation, unemployment, MSMEs growth among others. Therefore the president shouldn’t say because they met their revenue target and are not borrowing from banks, then the economy is stabilised.
“To be on a safer side he would have said the economy is on the part of stabilisation,” he said.
He further called for more industrialization and infrastructure development that will create jobs and boost the economy.
President Bola Ahmed Tinubu has announced that the Federal Government is no longer borrowing from domestic banks, citing a significant revenue breakthrough driven by non-oil sectors.
The declaration came during a meeting with members of the Buhari Organisation, led by former Nasarawa State Governor, Senator Tanko Al-Makura, at the Presidential Villa.
Tinubu stated that Nigeria had met its annual revenue target by August, attributing the achievement to robust non-oil revenue performance.
“The economy is stabilised, nobody is trading pieces of paper for exchange rate anymore. We are going up. Today I’m standing before you, I can brag that Nigeria is not borrowing a dime from local banks,” Tinubu said.
“The revenue, we have met our target of revenue for the whole year, we’ve met it in August. Non-oil. If non-oil revenue is doing well, then we have no fear of whatever Trump is doing on the other side.”