Business
Budget office DG defends Tinubu’s foreign engagements, faults Peter Obi’s claims
The Director General of the Budget Office of the Federation, Tanimu Yakubu, has defended the foreign engagement strategy of President Bola Tinubu, describing recent criticisms by the former Anambra State Governor, Peter Obi, as a “populist simplification” of Nigeria’s economic realities.
Mr Yakubu, in an article titled “Foreign Engagements and the Dangers of Populist Simplification: Peter Obi’s Ignorance,” argued that Mr Obi failed to appreciate the complexities involved in rebuilding investor confidence and restoring economic stability in a country emerging from fiscal and monetary challenges.
On 16 May, Mr Obi criticised the value of recent foreign state visits by Nigerian leaders, arguing that such engagements must translate into measurable economic benefits for citizens, rather than ceremonial visits.
“State visits by leaders are not tourism, and diplomacy is not a fashion parade,” Mr Obi said.
According to Mr Yakubu, the Tinubu-led administration inherited an economy burdened by structural weaknesses, including fuel subsidy costs, exchange-rate distortions, mounting debt-service obligations, dwindling investor confidence, and heavy reliance on the Central Bank of Nigeria (CBN) financing to sustain government operations.
The Budget Office DG said under such conditions, international engagements should not be viewed as ceremonial trips but as strategic efforts aimed at rebuilding sovereign credibility, strengthening diplomatic relations, restoring investor confidence, and attracting long-term capital.
Mr Yakubu said the former Anambra state governor oversimplifies economic realities, which has a tendency to reduce complex questions of economic recovery.
“No serious analyst disputes that foreign engagements should ultimately produce measurable economic outcomes. The real issue, however, is whether Mr. Obi properly understands the sequence through which nations emerging from fiscal and monetary instability rebuild investor confidence, restore credibility, and reposition themselves within global capital markets.
“President Tinubu inherited an economy facing severe structural stress: an unsustainable fuel subsidy regime, multiple exchange-rate distortions, collapsing fiscal buffers, mounting debt-service pressures, dwindling investor confidence, and unprecedented dependence on Ways and Means financing simply to sustain government operations.
“Under such circumstances, international engagements are not mere ceremonial excursions; they become instruments for rebuilding sovereign credibility, restoring policy confidence, reassuring investors, strengthening diplomatic alignments, attracting long-term capital, and repositioning the country within regional and global economic networks,” Mr Yakubu said.
Economic comparison
He also faulted Mr Obi’s comparison of Nigeria’s economic situation with that of the United States under former President Donald Trump, saying the two countries operate under entirely different economic realities.
According to him, the United States engages China from the position of the world’s dominant reserve currency issuer, also as the largest consumer market on earth, and a mature industrial economy with deep capital markets and global technological dominance.
In contrast, the director general said Nigeria is a reforming emerging economy attempting to stabilize itself after years of fiscal distortion and policy disequilibrium.
Mr Yakubu further argued that the benefits of international engagements often take time to materialise, stressing that major investments, infrastructure partnerships, and sovereign financing commitments usually emerge gradually after sustained diplomatic and economic engagement.
ALSO READ: Ex-foreign affairs minister criticises Tinubu’s ambassadorial appointments
He described it as contradictory for critics to oppose reforms such as fuel subsidy removal and exchange-rate unification while simultaneously demanding immediate foreign investment inflows.
Mr Yakubu said its is inconsistent to oppose stabilization reforms on one hand while simultaneously demanding the investment confidence that only such reforms can eventually produce.
“More importantly, many of the benefits of state engagements do not materialize instantly in the form of dramatic headline announcements. Serious investments, infrastructure partnerships, manufacturing relocations, energy financing arrangements, and sovereign investment commitments often emerge gradually after sustained diplomatic engagement, policy stabilization, and investor confidence-building.
“Ironically, many of the same critics now demanding immediate investment inflows were among those who opposed the difficult stabilization reforms, including fuel subsidy removal and exchange-rate unification, that were necessary to restore the macroeconomic credibility investors require before committing long-term capital,” he said.
He extolled the administration and CBN’s achievements in stabilising the economy with reforms, and that Nigeria was approaching a dangerous fiscal cliff before the administration’s intervention.
“Diplomacy should indeed generate economic value. But rebuilding a damaged economy requires more than slogans, photo comparisons, or selective foreign analogies.
“It requires difficult decisions, international re-engagement, policy credibility, institutional stabilization, and the patience necessary for long-term economic restructuring to take root,” Mr Yakubu said.
President Bola Tinubu has challenged Nigerian banks to shift their focus from financing the government to providing affordable credit to businesses and productive sectors of the economy to drive investment, production and job creation.
Mr Tinubu, who was represented by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, made the call at the 19th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria (CIBN) on Tuesday.
The President said while the government’s economic reforms had restored macroeconomic stability and improved investor confidence, the next phase must focus on converting those gains into investment, production, jobs and improved living standards.
“The current phase of our reform journey is accelerating the conversion of stability into investment, investment into production, production into jobs, and growth into improved living standards,” he said.
He urged banks to move “from intermediation to transformation”, arguing that the performance of financial institutions should no longer be assessed only by balance-sheet growth, profitability and shareholder returns.
According to him, the critical question should be what the financial system is doing for the real economy.
“A resilient banking system cannot assist indefinitely where businesses cannot obtain affordable credit. Manufacturing that is struggling cannot expand, and millions of productive MSMEs remain outside the formal financial system,” Tinubu said.
He said the government was therefore expanding the architecture of guarantees, risk-sharing, blended finance and credit enhancements, with a National Credit Guarantee Company at its core, to crowd in private capital and support productive investment.
The Nigerian leader said success should increasingly be measured by how much productive capital government policies catalyse, rather than simply by how much the government spends.
Banks must finance growth
The President also said the recently concluded bank recapitalisation must result in more than larger balance sheets, stressing that it should translate into increased capital formation in the real economy.
“It must translate into capital formation in the real economy, financing Nigerian businesses as they expand across Africa and pursue our ambition of a $1 trillion economy,” he said.
“A bigger bank that does not finance a more productive economy is a suboptimal outcome.”
He also called for broader financial inclusion, saying access to bank accounts does not automatically translate into access to finance.
He said the financial system should enable small businesses and entrepreneurs to obtain working capital based on viable cash flows rather than collateral they may not possess.
“We must build a system that finances potential and opportunities rather than quick gains for the privileged,” he said.
Mr Tinubu further called for a transition away from a financial system where attractive returns on government securities make lending to productive businesses less compelling.
He said that improving fiscal conditions would allow the government to create more space for private-sector credit progressively.
The President described the desired outcome as a “virtuous cycle” in which stronger fiscal discipline reduces pressure on government borrowing, lower inflation lowers interest rates, and cheaper capital stimulates investment and production.
He added that increased production would generate more jobs, incomes and tax revenues, further strengthening fiscal sustainability.
“That is how gains from reform begin to compound at scale, and the financial sector must be ready for that transition,” he said.
Tinubu also identified technology, long-term capital and trust as key pillars of a resilient financial system, warning that greater digitalisation would bring increased cybersecurity risks.
He said Nigeria would need to deepen its capital markets, insurance, pension, and asset management industries to mobilise domestic savings and foreign capital for long-term investment.
On the broader economy, the President said Nigeria’s GDP grew by 4.43 per cent in the second quarter of 2026, while headline inflation had eased to 15.43 per cent and external reserves had crossed $54 billion.
He said the improvements showed that “stability has returned” and “credibility is rising”, but cautioned that macroeconomic stability should not be mistaken for economic prosperity.
“Stability is a foundation; prosperity is a destination,” Mr Tinubu said.
“The good news”
In his remarks, Dele Alabi, President/Chairman of Council, CIBN, said the good news is that certain policies implemented in the past couple of years are beginning to yield fruit.
For example, he argued that within Nigeria’s financial system, 33 banks met the revised minimum capital requirements, raising ₦4.65 trillion in new capital, providing a further buffer against domestic and external shocks.
READ ALSO: Credit bypassing Nigeria’s job creators — World Bank Official
“Likewise, recent indicators show that these efforts are beginning to rebuild confidence. As announced by Moody’s Ratings on 28 August 2026, Nigeria’s outlook was changed from stable to positive while the sovereign rating was affirmed at B3,” he said.
Additionally, the CIBN president explained that according to FTSE Russell’s March 2026 Semi-Annual Country Classification Review, Nigeria will be reclassified from Unclassified to Frontier market status, effective 21 September 2026.
“To top all this off, the icing on the cake is that according to the latest figures from the National Bureau of Statistics’ Q2 2026 Gross Domestic Product Report, real GDP grew by 4.43 per cent year-on-year in Q2 2026, up from 3.89 per cent in Q1 2026,” Mr Alabi said.
He noted that collectively, these are important signals of stronger macroeconomic stability, improved investor confidence, and the prospect of broader access to global capital.
He explained that the true test is whether stronger fundamentals translate into lower living costs, more jobs, higher real incomes, affordable credit, reliable public services and reduced poverty.
“Macroeconomic progress must therefore be felt at the micro level – in households, small businesses and the daily lives of ordinary Nigerians,” Mr Alabi said.
He said it is for this reason that the theme of this year’s Conference is sound, and as Nassim Nicholas Taleb aptly observed in his book Antifragile, “Wind extinguishes a candle and energises fire.”
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