Tinubu economic reform policies may lead to social unrest – Analysts warn

Tinubu economic reform policies may lead to social unrest – Analysts warn

The international rating agency, Moody’s, has warned that the economic reforms of President Bola Tinubu may lead to social unrest that would potentially derail the expected progress.

Moody’s in its latest report titled “Inside Africa, 2023” gave the warning.

The analysts at Proshare Nigeria noted that while President Bola Tinubu’s pro-market policies had continued to receive favourable reviews from international agencies and companies, the realities in Nigerian wallets gave a different tale.

It said the policies carried high political risks, rising inflation and consequent public outcry.

According to the credit rating agency, the removal of the petrol subsidy will raise oil prices and reduce the purchasing power of citizens against a backdrop of crushing inequalities.

It therefore called for a delicate balance between the two.

It also noted that the administration’s foreign exchange (FX) unification policy would reduce market distortion but it had weakened the naira and could lead to higher imported inflation.

It stated that the ultimate priorities of the government should be improving the welfare and prosperity of Nigerians, rather than pandering to foreign economic preferences.

They noted, however, for Nigeria to relieve the stress of its citizens it must attract direct foreign investors and investment (DFI) and therefore, provide a compelling reason for fresh investment funding.

The analysts believe that President Tinubu’s ambitious reform agenda holds the potential for significant long-term economic gains, particularly with a more efficient allocation of resources and improved foreign investment.

However, the short-term pains of higher cost of living, lower purchasing power, and looming social unrest present substantial risks.

It warned that while the government intended to curb the corruption and inefficiencies associated with the subsidy regime, the oil subsidy reform could worsen social inequalities and poverty in the short term, as the palliatives would only marginally offset the large spike in costs borne by Nigerians.