The Problem with Inflation: How Tinubu’s Economic Approach is Hurting Nigeria
Managing the economy is crucial for any government. It helps improve people’s lives, create jobs, reduce poverty, and tackle insecurity. As a former British prime minister once said, “The economy is the start and end of everything.” Unfortunately, Nigeria’s new president, Bola Tinubu, seems to overlook this important truth.
Tinubu’s economic approach, known as ‘Tinubunomics’, shows a lack of understanding about how the economy works. In this article, we will focus on Tinubu’s attitude towards inflation, which is considered the worst economic evil.
To understand Tinubu’s approach to inflation, we need to look at his past statements. In 2015, Tinubu wrote an article titled “Slump in Oil Prices: A Progressive Way out.” He argued that countries could circulate an unlimited amount of their currency, even if their foreign exchange earnings dropped significantly. According to him, Nigeria could “run naira fiscal deficits indefinitely” by borrowing and printing
In his 2023 presidential election manifesto, Tinubu pledged to “break the explicit link between naira expenditure and dollar inflows” and “legislatively suspend the limits on government spending.” This means that he wants to remove restrictions on the amount of naira his government can spend and pursue aggressive fiscal activism through printing money and borrowing.
Tinubu fails to understand the consequences of his economic approach. Continuously printing money and borrowing to fund large budget deficits will lead to high inflation, a devalued currency, capital flight, and a lack of foreign investment. A strong and stable macroeconomic environment, including low inflation, is crucial for attracting foreign investment and growing the economy.
In October 2022, Tinubu defended the Buhari government’s borrowing spree by comparing Nigeria to America. However, this comparison is flawed. America is the world’s largest economy, with a strong currency and a central bank that actively fights inflation. Nigeria cannot afford to ignore the negative consequences of excessive borrowing and printing money.