The Financial Times implies that the effectiveness of Tinubu’s economic reforms might be waning

In an editorial, the Financial Times publication based in London has observed that President Tinubu’s economic reforms appear to be encountering challenges, suggesting that despite his initial bold steps, which included the removal of fuel subsidies and a shift toward a market-driven exchange rate, events in the past four months indicate that further efforts are needed.

The publication stated:

“While President Tinubu has made progress by eliminating a costly fuel subsidy and transitioning to a market-driven exchange rate, which has significantly devalued the previously overvalued currency, his reform agenda seems to be encountering obstacles four months into his presidency.”

Regarding the removal of Mr. Godwin Emefiele, the former Governor of the Central Bank of Nigeria (CBN), the report noted that it raised eyebrows due to its unconventional nature, giving the impression of political retaliation. Initially, Emefiele had faced charges related to the alleged unlawful possession of firearms.

The report commented:

“The removal of Godwin Emefiele, the former governor, was overdue. However, the manner in which it occurred, initially involving charges of firearms possession, was unusual and appeared to be driven by political motives. Additionally, the new exchange rate regime has yet to be adequately explained.”

Regarding the new exchange rate regime and how the new CBN leadership can stabilize the financial system, the report suggested that the incoming governor would likely need to raise interest rates to combat inflation but emphasized the importance of President Tinubu ensuring the independence of the institution.

In their words:

“Many consider Cardoso, a former Citibank Nigeria chair, to be a sound appointment, although not all of Tinubu’s selections have received the same level of confidence. The incoming governor will likely need to raise interest rates at the next policy meeting to establish his commitment to curbing inflation. Tinubu must protect the institution’s independence by allowing the central bank to carry out its responsibilities. In other areas, the president must be more active and communicate more effectively.”

The report further noted that the new administration risks losing the gains of its earlier reforms and advised President Tinubu to provide clear explanations of his policies before implementing them, citing the example of the restoration of democracy.

It concluded:

“Only four months into his presidency, what started with enthusiasm now faces challenges. President Tinubu needs to regain momentum to ensure the success of his reform agenda.”