Tinubu’s economic reforms hard but necessary

The chairman of BUA Group, Abdulsamad Rabiu, has commended the economic reforms of President Bola Tinubu, saying, it’s a difficult step taken in the right direction.

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Mr Rabiu made this point on Friday when he visited the president in Lagos.

Nigeria is witnessing its worst cost-of-living crisis in a generation, caused by the removal of petrol subsidies and the devaluation of the naira.

Mr Tinubu, who came to power about 18 months ago, removed a decades-old petrol subsidy and devalued the currency, sending inflation soaring to 34.60 per cent in November.

Mr Rabiu acknowledged that the reforms are painful but said they were necessary.

“Although we all know that some of the reforms undertaken by His Excellency are still biting, and these reforms, as far as the business community is concerned, were necessary.

“It’s true that some of them are quite painful, but we needed these reforms, especially the foreign exchange unification.”

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Aside from the subsidy removal, the Central Bank of Nigeria (CBN) implemented the unification of all segments of the forex exchange (FX) market as part of efforts to engender transparency in the markets and boost investors’ confidence.

Although the policy has been widely applauded as well-intentioned and necessary, it has put additional pressure on the local currency and manufacturers, with ripple effects on prices.

Mr Rabiu also commended the unification of the forex exchange.

“You will remember that the exchange rate at N500 and then outside it was N800. That was not acceptable. So that has actually been unified and initially it was quite difficult, we saw the exchange rate at a point hit maybe almost N2000, now it’s finding its balance, we are at about N1,500 – N1,550 naira and I’m sure we’ll see the rate come down even further.”

“So I believe that some of these reforms… yes, initially, they were a bit of a challenge, but things are getting much better now, and I’m quite confident and optimistic that things will definitely get better in Nigeria. Mr President is doing a lot, the government is really doing so much to ensure that there is stability within the economy and other sectors of the economy,” Mr Rabiu said.

Like Mr Rabiu, recently, the International Monetary Fund welcomed reforms that are being implemented by Mr Tinubu’s government, and it forecast faster economic growth in the West African nation and other key economies on the continent.

Mr Rabiu also commended the infrastructural reforms undertaken by the Tinubu administration.

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“We can see what is going on as regards our infrastructure, a lot roads works are going on and I believe, given a bit of time, things will definitely get better. We need to be a bit patient, these reforms do take time.

“This government has only been in power for 18 months and they have another 24 months or so, I think we need to give them time and I’m sure things will definitely get better.”