Nigeria’s president-elect, Bola Tinubu, will be inaugurated today in the capital, Abuja. Tinubu takes the reins from outgoing President
Nigeria’s president-elect, Bola Tinubu, will be inaugurated today in the capital, Abuja.
Tinubu takes the reins from outgoing President Muhammadu Buhari and will inherit public frustration with high levels of debt, disappointing economic growth, and reduced oil output. Nigeria’s budget deficit has grown faster than the economy has in recent years, swelling to $103 billion last year, a 60% increase since 2015. While debt increases, oil revenues have been negatively impacted by oil-theft and disputes within the sector. Meanwhile, fuel subsidies cost the government $9.2 billion last year. Unemployment and unreliable power systems are additional challenges that the new president will face upon taking office.
It’s likely that the first course of action for Tinubu will be to cut fuel subsidies. While the subsidies were intended to keep fuel prices affordable, they are generally seen as costly, and as a pathway for corruption that does little to help working-class Nigerians. While Tinubu may see a dip in popularity due to a brief surge in living costs this decision will save the Nigerian government money that could be injected into education, energy, healthcare and housing in the long-term. Corruption remains a major issue in the country that will likely limit the immediate success of cuts to fuel subsidies.