Is Tinubu the man to unleash Nigeria’s economy?

STORY: Nigeria’s new President Bola Tinubu has had a busy first month in office.

He’s implemented a raft of radical changes aimed at unleashing the full potential of Africa’s sluggish economic giant.

That race to reform has wowed investors.

But some analysts, observers and business leaders warn that bigger hurdles lie ahead.

And they question whether 71-year-old Tinubu, viewed by many as part of Nigeria’s old guard, is the man to conquer them.

Days after his inauguration, Tinubu scrapped a popular, decades-old fuel subsidy.

He then quickly suspended the central bank governor and freed up the exchange rate.

These reforms should have long-term payoffs.

The World Bank said on Tuesday (June 27) that the forex and petrol subsidy reforms could save Nigeria 3.9 trillion naira, or $5.1 billion, this year alone.

However, it also warned of growing inflationary pressures in the short-term.

Petrol prices have nearly tripled since the end of the fuel subsidy.

That’s in a country where millions rely on petrol-powered generators.

A resulting naira devaluation from forex reforms could accelerate inflation.

Meanwhile, Nigeria faces record debt.

Unemployment is high; power shortages have contributed to years of anemic growth.

Oil output is also shrinking and insecurity is high.

Observers say tackling these problems is made harder by rampant corruption and entrenched patronage networks.

Bismarck Rewane is CEO at Lagos-based Financial Derivatives Company.

‘’The path to political power in Nigeria, over time, has always been through these vested interests. And when you deny them of their source of livelihood, then they will fight back.”

That could create a challenge when tackling, for example, insecurity.

The military has its own entrenched patronage system.

Political analysts say armed groups in the Delta, involved in industrial scale oil-theft, operate with support from some politicians.

Tinubu will be judged on how he tackles such networks.

But he also largely owes his own election victory to the deeply political, religious and tribal networks of his own party.

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They will have their own interests. Observers worry Tinubu will be beholden to such forces.

He has suspended the head of the financial and economic crimes agency, but not yet outlined an anti-corruption. plan.

Nnamdi Obasi, senior Nigeria advisor for the International Crisis Group think-tank, said Tinubu has “never been known to be a great fighter of corruption” and that his “body language doesn’t suggest anything radical will be done”.