Ilorin, Nigeria – On Monday, as Nigeria’s President-elect Bola Tinbu is sworn in, Olusegun Badmus will be one of millions to watch.
But for the 57-year-old bus driver from the central Nigerian city of Ilorin, there is hardly any excitement after years of disappointment with the government, including the outgoing administration of President Muhammadu Buhari.
Under Buhari, Nigeria has overtaken India as the poverty capital of the world with half of its estimated 200 million people now living in abject poverty. The naira also lost 70% of its value to the dollar as Africa’s biggest economy suffered two recessions.
“Buhari’s government has really let us down,” Badmus told Al Jazeera. “He leaves the country worse than he met it, but I just hope Tinubu can perform as he promised.”
Tinubu, a former governor of the country’s commercial capital, Lagos, was declared the winner of the February 25 presidential election ahead of Atiku Abubakar and Peter Obi by the Independent National Electoral Commission.
Yet the new president is facing legitimacy issues after winning with just a third of the vote in a poll in which only a quarter of Nigeria’s 93 million registered voters cast their ballots.
Opposition parties have challenged the election process and results, citing irregularities, electoral fraud and a lack of transparency in the election commission’s methods. A hearing into their complaints began on May 8 and is expected to end on June 23.
Some opposition supporters hope the transition process will be stalled until there is a verdict in the cases, indicating a decline in confidence in government institutions, said Joachim MacEbong, senior government analyst at the Lagos-based analytics firm Stears Intelligence.
“A lot of people don’t feel like they [institutions] can be fair and impartial, and that’s actually the real issue here,” he told Al Jazeera.
While some Nigerians are waiting for this process to play out in court, others are already looking to Tinubu for quick economic solutions.
Controversial cuts
More than a third of the country’s population is currently unemployed and voters expect 71-year-old Tinubu to create jobs, fix the plummeting economy and boost security in line with his campaign promises.
The president-elect also spoke of plans to reinvigorate the agricultural sector, increase power generation to fix Nigeria’s notoriously unreliable electricity system and reduce fuel subsidies.
He is often credited with increasing Lagos’ internally generated revenue from $3.77 million per month when it opened in 1999 to an average of $32 million per month in 2006 on the eve of its release.
Economists are already predict that Tinubu, who criticized a recent overhaul and currency swap, should devalue the naira by up to 15% to help stabilize the economy.
The most controversial decision the new president may have to make may also be the most impactful: cutting fuel subsidies.
Subsidies were introduced in Nigeria in 1973 as a temporary measure to offset a spike in oil prices. They have remained in place and have long been a controversial measure although they are used to keep fuel prices affordable.
They are widely seen as an avenue of corruption and waste, only benefiting the wealthy and middle class rather than the working class they are meant to help.
From January to September 2022, Nigeria spent 2.91 trillion naira ($7 billion) on fuel subsidies. In the same year, more than 10 billion dollars were diverted in a fuel subsidy scam.
In January 2012, then-President Goodluck Jonathan announced he would cut subsidies, sparking nearly two weeks of nationwide protests by the opposition, unions, civil society and others. Nigerians.
Jonathan reconsidered his decision and Buhari wavered on the matter. But Tinubu has already declared himself ready to cut subsidies from his first days in office.
“If you look at the fiscal health of the country, you will see that the subsidy has to go sooner rather than later,” he said on the campaign trail. “Nigeria’s debts are partly caused by fuel subsidies, and the poorest in society don’t benefit much anyway.”
While this could cost the new president political points, experts say the move is the right one for Africa’s biggest oil producer.
Still, serious resistance is expected from many Nigerians, as the end of subsidies will also lead to an increase in the cost of living.
“What I want Tinubu to do is find a way to reduce the price of fuel and other goods and services,” Badmus said. “We buy gasoline with all our profits. We’ve almost run out of money to take home.
If Tinubu’s administration passes that test, MacEbong said, the money it saves could be diverted to education and health care for low-income households.
This month, the world’s largest single-train oil refinery, with a production capacity of 650,000 barrels per day, was commissioned on the outskirts of Lagos. Nigeria’s first private refinery is owned by Africa’s richest man, Aliko Dangote, but state-owned Nigerian National Petroleum Corp owns 20% of the shares.
The project is expected to help Tinubu stabilize the economy and reduce inflation, which currently stands at 22%, economists said.
“The refinery means that we will save the central bank between $20 and $23 million that would have been provided to continue importing PMS [premium motor spirit] in Nigeria, said Paul Alaje, Senior Economist at SPM Professionals, a Lagos-based management consultancy.
“So this is great news for us,” he said. “We are going to have significant growth in our foreign exchange reserve and that means that in the coming period we are going to see a significant increase in the value of the naira.”
A bull market?
After Nigeria’s electoral commission announced Tinubu’s victory, Nigerian bonds surged. Investment banking giant Morgan Stanley turned bullish in the market, based on its hopes that the president-elect would prioritize fiscal and financial market improvements.
But that shouldn’t be cause for early celebration yet, analysts warned, pointing to similar gains in 2015 before a reversal, sparked by a series of political missteps by Buhari.
“The market will always try to be optimistic about the new president, but whether that will continue remains to be seen,” MacEbong said. “It depends on the reforms and how quickly they are carried out so that the market receives the necessary signals.”
Back in Ilorin, Badmus is skeptical of any economic growth, but hopes Tinubu’s time as Governor of Lagos State can help turn things around.
“At this point, I trust God and not politicians,” he said as he parked his bus and finished his day’s work. “I hope Tinubu will change the situation of the country and be a balm to our sufferings.”