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For years, Nigeria has not been so much a sleeping as a comatoso. Home of almost one in five sub -Saharan Africans, its 230 million people market should be a continental growth engine. On the other hand, it has been a drag, stuck in a oil -dependent routine, full of bandidry and directed by an political elite committed to the self -gred. It is not surprising that all but a few investors have lost the fact that Nigeria has folded a corner.
In the middle of the first presidential term of Bola Tinubu, who completes two years in office this Thursday, Nigeria is in Better form that at any time in the last decade. That can be a surprise, or even sound like a sick joke, dozens of millions of Nigerians who suffer the worst cost of the living crisis in a generation.
However, Tinubu, a former governor of Lagos and the most acute politician in the country in a generation, has stabilized the economy and has established the bases for a broader recovery. This year, the World Bank awaits a growth of 3.7 percent, in what would be NigeriaThe best performance since 2014 except for a bounce after covid. Most common Nigerians will not feel that yet. But it is a decent yield when oil prices are weak. The small green shoots have arrived because the Tinubu government has approached, although often random, weakening structural distortions.
The first day, Tinubu eliminated a ruinly expensive fuel subsidy. More importantly, the Central Bank has restored monetary policy orthodoxy after a chambólica era in which only the bonds with access to cheap dollars benefited. After a dangerous excess, the Naira has stabilized, with the gap between the official and black market rate that is reduced to almost nothing.
The Central Bank has stopped printing money to pay the government’s displacement. Politicians still pass too much, often in fripperies as an extravagant presidential planeBut at least the government has begun to increase tax receipts.
Investors do not live with constant fear of a devaluation and can easily access dollars. That can eventually help Nigeria diversify, but at a shorter term it is positive that oil production has recovered from a barrels of 1 mn per day to almost 1.5 million last month. Oil theft has been reduced and local companies They are squeezing more of the marginal fields.
That has been achieved by a government stuffed with cronies, and, to be fair, one or two competent technocrats, they show how much it could be achieved if Nigeria really acted together. There are many ways for Tinubu to be built in a promising beginning.
First, his government has to address inflation, which continues to function with 24 percent, more urgently. The food is the biggest driver. State governments must increase the supply by providing agricultural inputs, security and better access to the market.
Secondly, it must be based on the tax reform achieving its declared objective of doubling the proportion of taxes raised to 18 percent of GDP. Some of that should be spent on unfortunate schools and clinics, even more urgent given the foreign aid cuts. That will bring its own benefits, but, as important, it will also help establish a social contract, which has lacked dangerously.
Third, and perhaps the most crucial, the Government must face bandidería and terrorism with the same mentality that made it distorted monetary policy. The army needs to clean as urgently as the Central Bank did.
As Nigeria’s electoral cycle addresses around 2027, Tinubu can be tempted to delay the rhythm of change. That would be a mistake. You must move forward, with the primary objective of making common Nigerians, not just investors, feel the benefits of shock therapy.