Mitigating the pains of President Tinubu’s market-based reforms, By Muhammad Sagagi

Unleashing an unspecified number of market-based reforms on the populace will be an over-kill, especially in an endemically poor society with an unacceptable level of income inequality. Policy makers must pause, between ‘episodes’ of reforms, reflect and update the situation on the basis of new ideas and information generated from the assessment.

Pundits have extolled the virtues of market-based reforms around the globe, but a key lesson is that there are always risks associated with their designs and implementation. Experience has shown that the ‘market system’ lacks the discipline or the coherence and orderliness to ensure a stable economic system. Although a market system enthusiast, I remain sceptical about its ability to determine prices and allocate resources – especially public goods – fairly, justly, and equitably.

For now, we should focus on the associated risks of these reform measures and the mitigating factors. Market-based reforms inflict excruciating pains on citizens, worsen poverty, unemployment and living standards. The withdrawal of subsidy payments has exacerbated Nigeria’s inflationary trends and will consequently lower real wages, reduce buying power and push millions into poverty. As inflation soars and businesses collapse, citizen’s levels of vulnerability and deprivation will undoubtedly increase.

As a rule, government must apply the balm where it pains the most. The burden of these reforms will be borne disproportionately by micro and small enterprises in the informal sector, as well as the marginalised populations, including the youth and adults with no incomes. Consideration may therefore be given to the following:

Set up an Infrastructure Rehabilitation and Expansion Fund to enhance the productive base of the rural economy and build resilience: The Fund will support the construction, rehabilitation and maintenance of rural infrastructure, including feeder roads, irrigation canals, rural electrification, food storage facilities etc., to enhance living standards and support sustained livelihood improvement;

Source: News Formal (newsformal.com)

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