Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: Nigeria was supposed to be Africa's powerhouse. Its vast population,
Speaker 2: cultural influence and oil reserves seem to set it up
Speaker 2: with a chance to be a big player among the
Speaker 2: world's major economies. But now it's facing what some are
Speaker 2: calling the biggest economic crisis in a generation and a
Speaker 2: government that is failing to meet its country's basic needs.
Speaker 2: With the world turning increasingly away from fossil fuels, did
Speaker 2: Nigeria get too hooked on oil?
Speaker 3: I have consistently maintained the position that the first subsidy
Speaker 3: had to go. This one's beneficiar measure add outleast its usefulness.
Speaker 3: Our economy is going through a tough patch.
Speaker 2: A year into the presidency of Bullet Tinubu. We're asking
Speaker 2: if reforms that he's tried to implement can help turn
Speaker 2: the country around, or whether they're making things worse for everyday.
Speaker 4: Nigerian's on the ground.
Speaker 2: I'm Jennifer Zabasadjap and this is the Next Africa Podcast,
Speaker 2: bringing you one story each week from the continent driving
Speaker 2: the future of global growth with the context only Bloomberg
Speaker 2: can provide. Bloomberg's and Duka or Jinmo has been working
Speaker 2: on this story and he's joining us now from abujab
Speaker 2: and Duka, thank you so much for joining us, and
Speaker 2: really great story.
Speaker 4: For everybody who hasn't taken a look at it, they should.
Speaker 2: So let's just start with President Tanubu because this is
Speaker 2: really sort of the crux of the story here and
Speaker 2: what's happened since he was elected a little over a
Speaker 2: year ago. Now talk to us about who he is
Speaker 2: and how Nigeria was faring when he was elected last year.
Speaker 1: Well, he's a format two time governor of Lego State.
Speaker 5: Lego State is Nigeria's commercial capital, the richest state of
Speaker 5: the country, the most populous city in West Africa, and
Speaker 5: he was elected on the back of what he did
Speaker 5: in Legos. He improved infrastructure, he tripled the internally generated
Speaker 5: revenue in the state and when he contested last year
Speaker 5: in the election, he came in on that promise of
Speaker 5: turny Ninjuria around as he did in Legos. During his
Speaker 5: time as governor, he was instrumental to Noble in the
Speaker 5: formation of the All Progressive Congress that's his party in
Speaker 5: twenty fifteen and when the party came into power in
Speaker 5: twenty fifteen, he was elected as the facto leader of
Speaker 5: the party and Ninia was in a difficult place when
Speaker 5: he took over. We had inflation that was in w
Speaker 5: d already, we had more, especially an economy that was
Speaker 5: struggling with.
Speaker 1: Very high budget deb seats.
Speaker 5: You had declining could production, which is a big problem.
Speaker 5: And so he came in promising to fix that. And
Speaker 5: mister sinopul knew exactly what he was getting into because
Speaker 5: he admitted that his challenges were there and that he
Speaker 5: was going to fix them.
Speaker 2: So then let's just get into some of the challenges.
Speaker 2: Then what is it actually looking like though on the
Speaker 2: ground for everyday Nigerians.
Speaker 5: Most Nigerians would tell you that you're facing the most
Speaker 5: difficult periods of their lives. And if you look at
Speaker 5: the data, it backs it up. Inflation is at a
Speaker 5: three decade high. The last time Nangeria experience such a
Speaker 5: high level of inflation rate was in the mid nineties
Speaker 5: when you still had the military rule.
Speaker 1: Here in Nigeria.
Speaker 5: You have Nigerians, we were already spending around six percent
Speaker 5: of your incommon fold alone, now having to spend far
Speaker 5: more just to survive. And I've seen the consequences of that.
Speaker 5: Earlier this year, we saw people hungry, people raiding warehouses
Speaker 5: where greens were kept and the army had to be
Speaker 5: calling to protect those warehouses. We saw stampede in legal
Speaker 5: people hewing up to get food and a couple of
Speaker 5: people die there. So things are quite die on the
Speaker 5: ground now. So people have gone through this very difficult
Speaker 5: period of high inflation rate and they've not really seen
Speaker 5: our wages increased to keep up with that.
Speaker 4: Do people blame President Tinubu for this?
Speaker 2: I mean he's only been in an office just over
Speaker 2: a year, and if you think about it, he's also
Speaker 2: from the same party as President Buhari, who was his predecessor.
Speaker 2: Who are people sort of pointing the finger at They.
Speaker 5: Blame him partly because this is his party. This party
Speaker 5: has been in past since twenty fifteen and he was
Speaker 5: instrumental in the emagence of form a President WM in
Speaker 5: twenty fifteen.
Speaker 1: So many Ninjerans feel that.
Speaker 5: He's part of this face this problem where people are
Speaker 5: passing through.
Speaker 3: Now.
Speaker 5: There are those also who are a little bit fair
Speaker 5: to him and they said, look, this man has only
Speaker 5: been in power for just over a year and challenges
Speaker 5: he met are not of his own making. And he
Speaker 5: even said that when he was campaigning that he's going
Speaker 5: to be his own man. He wasn't going to take
Speaker 5: the responsibility for the problems challenge is created by his
Speaker 5: party and by his predecessor. He's worked back on some
Speaker 5: of the policies of the previous government and he's made
Speaker 5: that clear that some of those policies did not work.
Speaker 5: So policies, especially two big reforms, have fined his government
Speaker 5: so far. When he came in last year at the
Speaker 5: end of May, he announced during his inaugurration that fuel
Speaker 5: subsidies was gone. And you have to understand that Nigeria
Speaker 5: is Africa's largest oil producer. However, we don't have local
Speaker 5: refinery and Nigerias so we have Africa's largest oil producers
Speaker 5: importing all of his refined fuel. Both governments then subsidizes
Speaker 5: this important fuel by but its not just what ten
Speaker 5: billion dollars in twenty twenty two, and that's huge.
Speaker 1: That's money that could.
Speaker 5: Have spent on education, money that could have spent on
Speaker 5: building hospitals when I could be spent.
Speaker 1: On building rules.
Speaker 5: And once in the book came in, he stopped that
Speaker 5: I'll come back to this later gen just to say
Speaker 5: that he had challenges and that has had to be
Speaker 5: to be reintroduced.
Speaker 1: That was one policy.
Speaker 5: The second policy was the exchange rate, and that was
Speaker 5: a big problem.
Speaker 1: For businesses in Nigeria.
Speaker 5: And so what you had during the former regime of
Speaker 5: president where it was different exchange rates. We had one
Speaker 5: for certain importers that we are close to the government.
Speaker 5: We had one for those who were trying to pay
Speaker 5: school fees for the.
Speaker 1: Children aboard those we are going abroad for health care services.
Speaker 5: And these multiple exchange rates, you know, equated a situation
Speaker 5: where there was around tripping and there was loss of
Speaker 5: habitraging the system.
Speaker 1: And once it came in singable, he also stopped that.
Speaker 5: So those we are two period forms of the previous
Speaker 5: administration that he stopped during his first month in office
Speaker 5: last year.
Speaker 2: It's interesting because a lot of African leaders are facing
Speaker 2: this dilemma, right because they need to sort of contend
Speaker 2: with the economic situation that their country is in. But
Speaker 2: then they're also hearing it from everyday citizens, right. We're
Speaker 2: seeing that in Kenya similarly. But would you say the
Speaker 2: situation has just continued to get worse then, just given
Speaker 2: what you mentioned about the fuel subsidies, about the naira
Speaker 2: sort of plunging.
Speaker 4: Have things gotten worse?
Speaker 1: It depends on what you ask Jen. You won't get
Speaker 1: this straightforward us.
Speaker 5: And if you ask ordinary Naingerians who have been at
Speaker 5: the receiving end of inflation that's spiked, triggered out of
Speaker 5: course by what you've mentioned, currency clunging. Currency has been
Speaker 5: developed twice since June last year. If you ask those
Speaker 5: Nigerians were having to grapple with this economic situation, they
Speaker 5: will say, look things I've gotten wars on that presenting boom.
Speaker 5: If we speak to foreign investors and we've seen lots
Speaker 5: of portfolio influence coming into night Egeria, they will say
Speaker 5: these reforms is carried out and what they're expected of him.
Speaker 5: The currency situation was such a nightmare for people to plan.
Speaker 5: Volatility created and you know the people who say that
Speaker 5: has continued into his time.
Speaker 1: But we've seen some stability in recent times.
Speaker 5: We've seen the parallel ex generate has almost equal with
Speaker 5: the official ex generate and that will be counted as
Speaker 5: a win by the Central Bank and by this government.
Speaker 5: So it depends on what we're asking foreign investors, the IMF,
Speaker 5: the World Bank. They think the administration and the reforms
Speaker 5: carried out so far on the rights track. However, for
Speaker 5: Narina enguriers, the feel that this is the worst period
Speaker 5: of their lives.
Speaker 4: And you gonna stick with us.
Speaker 2: When we come back, we'll talk about how the largest
Speaker 2: oil producer in Africa, of course that's Nigeria is still
Speaker 2: facing an energy crisis.
Speaker 4: We'll be right back and welcome back.
Speaker 2: And Duga is stal with me as we look at
Speaker 2: Nigeria and its economy as it faces what some are
Speaker 2: calling the worst economic crisis in a generation. So and Diaka,
Speaker 2: we were talking briefly about this before the break. Nigeria
Speaker 2: is the largest oil producer in Africa. You wouldn't know
Speaker 2: that based on imports that you were just mentioning. It's
Speaker 2: also a member of OPAK. So why is the money
Speaker 2: not reaching the economy? What is the disconnect here?
Speaker 5: It's a question that most Nandurans ask themselves every day,
Speaker 5: especially if you go to the Niger Delta where you
Speaker 5: have these communities where the oil is socked out from.
Speaker 5: Most of those communities are some of the pogrest communities
Speaker 5: in the country, if not in Africa, So they live
Speaker 5: in that much wealth, it doesn't trickle down to them.
Speaker 5: And it's a combination of several factors. The state owned
Speaker 5: National Patrolum Company, it's one of the most opique companies
Speaker 5: in the world. Its books are rarely opening. It's released
Speaker 5: its last audited accounts in twenty twenty two after several
Speaker 5: years of not doing that. At a moment, for instance,
Speaker 5: jen no one knows the true state of the subsidy
Speaker 5: payments in Nigeria. We know for a fact that Fewgerslam
Speaker 5: prizes have been cucked since.
Speaker 1: August last year. We don't know how the NPC is
Speaker 1: doing that.
Speaker 5: The piece it keeps insisting that is no longer paying
Speaker 5: any subsidy on that we know that it is not
Speaker 5: possible because food is an international product and we've sent
Speaker 5: prices fluctuting international markets, but it remains stable here in Nigeria.
Speaker 1: So it means that the mass is not adding up.
Speaker 5: But the end piece won't give you any answers to that,
Speaker 5: and it gives you snapshot of how there is that
Speaker 5: lack of transparency and accountability in Nigerias or sector and
Speaker 5: that has led to a lack of investment by the
Speaker 5: big oil companies.
Speaker 4: So then and just to wrap up. I mean when
Speaker 4: we look forward.
Speaker 2: I know it's hard to predict just given all of
Speaker 2: the moving parts that are happening right now, but what
Speaker 2: is the outlook or maybe what is going to ultimately
Speaker 2: determine whether or not these reforms that President Tinubu is
Speaker 2: putting in place is actually going to start working. I mean,
Speaker 2: what is it that we need to pay attention to.
Speaker 2: Is it when people stop demonstrating? Is it when imports
Speaker 2: of oil go down? What would you say? I think
Speaker 2: we have to look at the exchange rate.
Speaker 5: We have to pin this on some of the big
Speaker 5: reforms of this government and to stand out so far
Speaker 5: one the free flot of the nairad and allowing the
Speaker 5: currency here to treat at its true value. We have
Speaker 5: to see if the government at some point begins to
Speaker 5: defend that, and that will be an indication that has
Speaker 5: then gone full circle from where it started.
Speaker 1: At the momento, the science look good.
Speaker 5: We've seen a major almost a major differences is quite
Speaker 5: minimal between the parallel markets of the nyorus value on
Speaker 5: the street and what is SCIPI in the Central Bank
Speaker 5: of Ninjuria is selling officially.
Speaker 1: On that score, I would say.
Speaker 5: The government is doing well so far. I think the
Speaker 5: next big thing though, is inflation. We have to keep
Speaker 5: an eye and the inflation rating the higinerier is quite
Speaker 5: high at the moment and the SIPEN has made clear
Speaker 5: that its one big barcel at the moment is making
Speaker 5: sure that inflation vite uses which feel it has picked
Speaker 5: and that's the indication we get from looking at the data.
Speaker 5: On the other hand, the big hurdlings across it is
Speaker 5: subsidy payments and what it decides to do with that one.
Speaker 5: It's more of a political issue than it is an
Speaker 5: economic issue, because most Nigerians see that cheap fuel that
Speaker 5: they have to buy the poems as the only thing
Speaker 5: that they gets from the government.
Speaker 1: And you don't blame some of them in the roads
Speaker 1: and bad states.
Speaker 5: In the hospitals are barely maintained, their calls for their treatment.
Speaker 5: I don't think the government has the political will to
Speaker 5: let gasoline sell at this true value in Nigeria, we
Speaker 5: think at the moment, and it did a suppose it
Speaker 5: by is selling for around half its price. If he
Speaker 5: decides to sell it freely, I think we might see
Speaker 5: Kenya style protest sooner rather than the thy in Nigeria.
Speaker 2: Right. We've seen in Kenya how the president has had
Speaker 2: to step to pressure from young people, so it will
Speaker 2: be interesting to see how that plays out in a
Speaker 2: country like Nigeria. Dukajin incredible reporting. Thank you so much
Speaker 2: for joining.
Speaker 1: Us this week. My pleasure, jim My pleasure.
Speaker 2: And as Juka mentioned, time will only tell whether Tanigu's
Speaker 2: reforms are actually bearing fruit. But if Kenya is any example,
Speaker 2: the president may not have much time to prove to
Speaker 2: Nigerians that the short term pain is in fact for
Speaker 2: the long term gain.
Speaker 4: This program was.
Speaker 2: Produced by Adrian Bradley. If you like the episode, don't
Speaker 2: forget to comment and subscribe. Wherever you are listening to
Speaker 2: this podcast, I'm Jennifer's Abasaga. Thanks as always for listening