President Bola Tinubu’s swift implementation of bold economic reforms has sparked excitement among foreign investors and placed Nigeria back in the global spotlight. After nearly a decade of being overlooked, Nigeria is once again a topic of conversation among foreign investors.
Tinubu’s decisive actions have surprised the world, achieving reforms that seemed unattainable during the eight years preceding his assumption of office just last month. On his very first day as president, he eliminated costly petrol subsidies, leading to a tripling of petrol prices. He swiftly followed this with a thorough overhaul of monetary policy, starting with the suspension of Godwin Emefiele as the Governor of the Central Bank of Nigeria (CBN). This was accompanied by the deregulation of the foreign exchange market, resulting in a significant devaluation of the naira in the official market.
While these reforms have caused hardships for Nigerians, who now bear the burden of higher fuel costs, they have drawn attention to Tinubu’s ability to tackle tough issues head-on. In contrast, his predecessor, Muhammadu Buhari, hesitated to make these difficult decisions due to fears of social unrest in a country grappling with widespread poverty and record-high inflation.
Tinubu, however, has successfully navigated the challenges, implementing reforms while managing to quell initial protests. Even though removing the long-standing fuel subsidy faced resistance, Tinubu launched a counter-offensive, leveraging a well-constructed legal argument that rendered the planned strike by the Nigeria Labour Congress (NLC) illegal. He referenced a Supreme Court judgment from 2010, which established that the right of trade unions must be exercised within the confines of the constitution’s provisions.
In addition to legal maneuvers, Tinubu leveraged his political influence to solidify support and prevent any backtracking on the subsidy removal. Political leaders, allies, and governors aligned with Tinubu acted swiftly to extinguish the flames of dissent, ensuring that the strike failed to gain traction, especially in the northern regions. Opposition parties, including some of their governors, had already been part of a collective decision last year under the National Economic Council (NEC) to define petrol subsidy as detrimental and unsustainable, proposing ways to remove it.
The subsidy removal and Emefiele’s suspension were only the beginning of Tinubu’s reform agenda. The floating of the naira, which had been stagnant for eight years, immediately followed, triggering a surge in the stock market to a 15-year high. Foreign investors are now eager to know who will assume the role of the next CBN governor, as Tinubu’s commitment to monetary policy house cleaning offers reassurance to those concerned about Nigeria’s unorthodox policies.
These remarkable developments have reignited interest in Nigeria within the foreign investor community. Major banks such as Standard Chartered, JPMorgan, and Goldman Sachs have all expressed surprise at the speed of reforms taking place in Africa’s largest economy. They anticipate further positive surprises in terms of the depth and speed of future reforms.
Tinubu’s political acumen and determination have impressed observers, who see him as a skilled leader capable of bringing people together. His ability to bridge divides and broker alliances has been evident throughout his career, including his role in forming the coalition that led to Buhari’s election.
The attention now turns to what lies ahead and the composition of Tinubu’s cabinet. Foreign investors are eager to witness Nigeria’s transformation under his leadership, with many expressing optimism that the country will undergo a dramatic positive change within the next four years.
As Nigeria continues on this trajectory, the world is watching closely, and investors are increasingly captivated by the prospects of a reformed Nigeria under President Bola Tinubu’s leadership.