 Thank you for staying with us. You're still watching the breakfast on plus TV Africa. It's time for a second hot topic And this is a statement by the former deputy Governor of the Central Bank of Nigeria, Kinsley Moghulu, and he says expecting the Naira to be 400 Naira to the dollar is a dream and that is by Kinsley Moghulu. Joining us to have a conversation about this is Mokta Mohamed is an International Finance and Economics Analyst. He's joining us from Lagos State. Good morning Mokta. Thank you for joining us Thank you for having me. Good morning. Okay, so The former deputy the former deputy governor of the Central Bank of Nigeria made his statement on his ex Platform and it says, you know expecting the Naira to be 400 Naira to the dollar is a dream Now I know that just a few years ago in fact Just after the lockdown after COVID we had seen the the dollar rise to about 400, right? but that's just about four years ago or maybe three and half years ago and Now the deputy governor of former deputy governor is saying it's a dream to even think of that something that happened just about three years ago It's a dream to even think the Naira can be as strong What do you think about that statement? Do you think it is a dream or do you think it's something that we can actually push for? Thank you once again It's free to dream So I don't see anything bad in all dreaming that the Naira will get to 400 after all speculators dream That the Naira will get to two thousand and the Naira has come to one thousand three hundred So there's nothing bad in dreaming in economics terms. I mean, we are free to dream because I was nothing to dream Now when you look at what he's trying to say is trying to look at them Do we already really have the pedigree to make sure that the Naira to the dollar gets to that amount I think I Say dream too far in the short term, but it's not a dream that is not possible Especially if you look at some of the policy that the government that put in place Especially if you look at how the government is trying to make the FX policy very transparent We are where we are today because the FX policy have never been transparent So we are beginning to see a little bit of transparency about to come into the effects But we've not seen it here, but we are about to see it That is one but again when you look at the original price of the night that is currently on the value and again The small bank and others have said the Naira we gain about 25 percent over the dollars this year And if you see that kind of presented game continue over the years, then you could be thinking of that but in this In the future, there's nothing bad in all dreaming For it to be possible in the near future. So that's what I I personally think about it I think It's possible, but again, there's a lot of work to be done Man, it's not something we should be dreaming will happen in the next one year in the next two years in the next three years It's something that will continue to work on maybe by the time we Fix our refineries and we begin to do local refining of particular petroleum product. We don't export Export refined petroleum. We don't import refined petroleum product any longer Then I will export refined petroleum product. We earn more effects into our economy We grew the non-o' s sector will begin to export most of our Agricultural output and and then I will mustn't forget the service sector We are the missouri the tech sector which Nigeria is a key player in Africa. We were able to build our infrastructure Also, that could be a game changer. So I don't think there's anything bad in dreaming But in the short term it's not possible when the long term. I think it's very possible Okay, so I mean moving on to his statement one thing He said, you know was the fact that we need to focus on the creation of value-added manufacturing export economy that and forex beyond oil and real And in real and significant terms the better But one thing he also said was we do not have a hundred billion dollars in foreign reserves So on what basis would a Naira forex rate return to some fantasy land in his words soon It will also take time to regain or achieve full investor confidence Such as we had when we were there and the rates was 150 to 165 to the dollar Now I remember when I was in uni the dollar was about 130 something sort of but now we're seeing 2000 we're seeing 1900 however, like you said, it's already about 1300 and something Speculators have said maybe in a few weeks it will get to 1200 which is great But what are the actions we can take for us to even get to the 400? So well, kiss the model as I said Pardon. He has said some he has said something that the where they were when they were there and I agree with him I think he was talking about when he was there during the time of his president Milusia go back some John good luck a village unit our result was about a hundred people And I was when we were thinking of moving subsidy at that time So that would have worked and maybe at that time we have floated our currency that would have worked But again, let's look at it this way again. If you think that was a very big mistake Not to do it at that. It's not a big mistake. Yeah It was a big mistake not allowing the currency to I mean to I mean to remove subsidy at that time It wasn't very very big mistake. I keep saying it was a political suicide by the then By the then ADC who are nine government and maybe they never thought they come that point But it was a very big political mistake and it was destroyed and at the end of the day They are the one paying the price more for it than the good luck administration What we did that time was I would have the SS food account and which was let that turn into the sovereign sovereign wealth Account and at that time what we did I would finish the oil benchmark Below the price of oil and then whatever we end with we put in our reserve as savings What we end above the oil benchmark was put in the reserve as savings as it stands now in more or less that we Virtually spend everything that we end because the difference between the current oil benchmark and what is sold for is Less than and and three dollars or five dollars So definitely the challenge and then we are still paying subsidy in one way or the other I believe coming up not categorically come to tell us that we are doing that so For us to get to that hundred billion savings I totally agree with him that we need to do a lot especially in the non oil sector and like I said exporting Refined petroleum product make sure that we're not like we're we're not depending on them so much into all that Importing them refine potential into the country then we grow our non oil sector and when you talk about values Added service service. We must not look away from the service sector when people keep talking about manufacturing Yeah, manufacturing is good It is the paperwork of any economy, but there are some countries that have not and be involved in manufacturing But yeah, they are the drivers of one of the economic indices in the world We talk about you what they did is to provide the enabling environment for other investors to come in and invest So that also could be a game changer Shouldn't just be thinking oh is the manufacturing because we have the property. Yeah, that is good Or we must also begin to look at The non extractive sector of the Nigerian economy the service sector I can we boost investment in that sector that will not cost us so much in doing So what has some untapped sectors? For me, I mean if I was to think top of my head, I know we're not doing so much with Tourism and that is because we still have like a security crisis in Nigeria So no one wants to come to a place where they don't feel secured Education for instance, and I said this earlier in the show if you look at the UK Most in fact a lot of their revenue comes from education because it provides good education to ensure that people come from all Parts of the world to study there so that way they get more money Agriculture we feel it seems like the oil boom came and everybody forgot how Nigeria was even built Before the before we discovered oil and so agriculture is not so much if you think about it It's almost almost what we eat almost all of the things that we eat is probably imported. We don't really try to Support the the local manufacturers or the farmers except maybe for perishable goods So what are some untapped? Sectors that you know for you you feel like we're not really utilizing it for us to be able to start to make more Money and even have this foreign reserves that we need I think one of your most untapped sector the tech tech sector You see Nigerians come up with content and Nigerian youth especially and most creative in Africa in the tech sector That's what we call the service sector. You see all the big players boo boo Microsoft Even Apple and Facebook meta. They are trying to have offices in Nigeria because of the creativity of the Nigerian youth So we need to look at that sector also and we have the youth population in Africa We want the biggest youth population and the most vibrant population in Africa that sector You know attract over 20 billion dollars a year into the Nigeria Economy we need to look at that sector But to build a sector you need to build infrastructure and that is where power comes to take because nobody wants to be in The space without power so the Nigerian youth have actually tried being in the space without power But they would do better if they have power then secondly also you've talked about education You can see that in the 60s up to the 90s We've seen Nigerian University attracting a forest student especially within Africa. Yeah, but now it's a pity We see Nigerian universities even Nigerians to them going to places like Ghana Burundi Kenya even for secondary schools So I think it's a sector that we need to work on and now And I'm proud to say that some Nigerian universities have been walking in the private sector You've seen that play out in universities like the Covenant University You see that play out in even in a member the week we invest even if you have not started and you don't begin to build it from your From said as well invested that we attract for a student and some some Nigerians in the diaspora actually bring their students to some of these universities outside the show of this country I mean from other than the diaspora bring that children into Nigeria and to school some of this private investing because of the character that They tend to develop in the student that is better than what they have outside the show of this country. So education also is one Key either for tourism. You see when it comes to tourism. There's a lot of things involved You've talked about one will talk about security second has to do with power Then totally has to do with the people you need to have a people friendly environment You need to have security. Also, you need to invest too much into it So it be built online is that we need to think of investment. We need to think of investment infrastructure We have local to cut around which I've been here before some years ago And but now I think it's it's even difficult to go there because the route networks are not good It's not that environment is not there. So we need to begin to build things that are tourism is one area We should also look at who do more very crazy and you're going to sleep. We've never been the manbella plateau Hello all this thing that we need to build on but unfortunately, I don't think we are in able to look within that space We are all like you said, we're looking towards oil oil because it seems to be easier to end all the effects I'm putting in the works to develop other sectors Okay, so you are you're rightly said we need more investment Obviously Nigeria even more most of our manufacturing Companies are leaving, right? But do you think that we have a good and thriving economy for us to actually attract these investors coming in? I mean the precedents has been traveling. He's been looking for foreign investors to come in But there's always that saying that if you don't have your house in order Nobody wants to come visit. Nobody wants to come there. So if we don't have a good economy Possibly nobody wants to come and put their money in a place whereby they don't think it to be profitable for them So what do you think about the economy? Do you think we can actually? You know bossfully act attract some foreign investors some good foreign investors that can actually come and you know even help our economy Yes, we have attracted it before nothing we can still do it Number one to create enable environments and they have to be the two-way exchange system No investor wants to come to your economy and then if I make my money and able to export my money back to my country That is the challenge that we always have because I think we have effects problem I want to hold back and they also want to export their money into the country and remember that some of this money I have effects money, so they need that will affect that result So we need to begin to create that two-way system system. We talk about manufacturing There are a lot of companies that are leaving and just like those are leaving there are others that are coming But we don't hear the news of those that are coming We always hear the news of those that are leaving Nigeria is a consumer driven economy And what it means is that any product that is friendly any problem that is people rented will have the market in Nigeria So a lot of people want to come in because of our population because our legacy we are a consumer driven economy That's why I'm saying that the government don't we are we need the manufacturing sector We don't all need to set up manufacturing plant We can create the environment where manufacturers can come to Nigeria and we'll be able to establish their plant and be able to do business Also, we can create that if you're whereby we become a hop whereby Manufacturers can come also. So it's a two-way thing. It's up to us to do what we ought to do to Improve upon and those sector but I totally agree with you that we have all We need to attract more investors into the country, but again when it comes to monetary policy Multi-policy will always do what they ought to do with the global best practice The physical side need to wake up and begin to think of how they can also impact the economy through physical policies That will attract long-term investors. That is the key and I don't I don't that has not been in existence Over the eight years of president Buhari and in the in the call in this current administration Maybe it's early days, but I've not seen that synergy yet So you're talking about money through policy and physical policy as well What are some reforms that you think the government specific reforms that you think the government can put in place for us to? Start to see the narrow appreciate. In fact, you know what let me backtrack a little bit for you What are some factors that you think led to where we are now? Right now obviously we've seen the devaluation of the Naira So what are some factors that you think this is this is what has happened first even get here And then these are some reforms that can you know, just help us make a u-turn from where we are to a better economy One of the major challenge that has brought us to where we have to be has to do with the the subsidy region We're paying subsidy for what does not even exist. I think it's with the largest Mostard of eating so deep in our economy subsidy as I did petroleum cross subsidy We we we state that in that space for so long a time And we make a lot of people billionaires without even supplying anything and this subsidy regime was always calm And I think most Nigeria agree that it was a scam with the current removal of subsidy and all of a sudden And the consumption of our four goals have gone down. So I think one of the yes Issue that brought us to where we are today is Our inability to remove subsidy on petroleum product that is one secondly again My wife effects regime and the foreign exchange regime was filled with a lot of my practicing Trying to you you you get the period the chain They were not really related they collected about twenty thousand dollars every week and yet they were selling a book the Approved price of CBN and CBN was being nothing about it and totally again We had we had the non oil sector that there was nothing down to improve upon that sector That sector was just come up to so those were the things that have taken us to where we are today And one of those things that we need to do to take us to a better place one We have done one of the removal of subsidy even if it's not in futility Hopefully within before the end of the year we might get there where we begin to import we begin to Do look at refining of our internal consumption of petroleum product Secondly the non oil sector needs to be needs to be one of the key travel the Nigeria economy Especially the agricultural sector and when I talk about the agricultural sector is not being a jack of all trade My stuff now we must look at our computer advantage in agriculture and begin to key into that and if you look at sector Let all be hop on that in that space But then if we do those two and then totally we need to begin to look at tax That's a way to grow our economy not just for revenue a lot We need to begin to see how we can use tax to grow the economy can use tax or attract big players Especially in the tech space where we have a lot of youths that are involved in it We bring most of those big triage and give them tax with it for some time I mean read tax with it not the type political type reveal that we've been given because you know somebody in government That also could be a game changer and also attract the informal set Into the tax bracket not taxing the already tax if I were to do this for policies I think and consistently improve upon them Would definitely be one of the most proposed nation in the world. Well, I meant to that I mean, that is that is the goal. That is the dream of every Nigerian But allow me to go off tangent a little bit Now the precedence has been in office for about 10 months on May 29. It would be one year in office If you look at our economic architecture at the moment, how would you grade the precedence? Well, first 10 months. Let me not say first first one year first 10 months in office for us to go to Well, I think dollar as of last year was still about 700 and something and then for us to go that to almost two thousand Naira Well, and now one thousand three hundred How would you rate the first year of the tinibu's administration? I think it has been poor if you talk about rating I think it has been very poor economic highly and especially when you look at in terms of where we were when they came in It is About I think it was about 600 to 700 when they came in and I think they've not handled that issue very well They allowed the gap to go on and on but luckily they are doing something about it now. So definitely That if you look at that A lot of Nigerians are for money property level. There is more high inflation they made inflation at about maybe like 18 percent today inflation is about 30% 31% Definitely that has not also helped them You look at the number like I said the number of Nigerians that are out of job also Over the 10 months that have come in has been not being good also So when you look at that you think it's poor But when you look at the policy they have put in place To attract growth to to move the economy from where it is to where they want it to be I think you should give them some code some or some decision they took are very very and very very Very very and a strong decision that a lot of corporate before them have shied it before Move our soft city floating of the Naira, even if it has cost to where we are today This way policy that needed to go even if they didn't they started in a shaking ground They did not do it very well, but I think if the policy is there and they are trying to reject it They are learning through the world. I think those are good policies the policy of liberalization of the effects market also putting up Policy in place. So when you look at the policies side, you could see the put of the policy But again policy doesn't result of what policy does not come overnight take years It could take months, but we'll begin to see those and resort in the near term and in the near And in future so when you look at that you say they've done well, but when you look at them Where Nigeria's where before they came in and where they are now? I think the administration has not done very well So I say that them where we I was not the art making Let me let me factor about it for eight years of the poor administration Nigeria where we're living in a very Autodox economic policy a policy that was not working a policy that will show with a lot of correction And nothing was done about it and when they came in they made an economy that was non-existent They had to take the hard decision, but they didn't have the background information they did not put in the structure to take those hard decisions And that is where we have the problem and now they are beginning to look at how can we Reduce this pain and they are coming out with policy even if it has not reduced the pain totally We hope in the near future. It will reduce the pain what we what happened to us in the same thing that Egyptian Government did but what they did was that they remove they remove subsidy in a lot of areas And they also they floated their currency but before they did that they mentioned They have a lot of liquidity which support from the IMF and warband and even the European Union So the faulted in this such a policy that currency came down Lost about 50% but the second day the currency came about 30% Because they have the liquidity to say oh our currency is currently on the value so we can intervene those were type of the groundwork We felt the foundation that would have put in place before we move subsidy or before we liberalize the Float the currency, but we didn't do that But we are doing that we are paying more higher price for it going forward But I think those policies are good policies that in the near future will see the result But like I said correctly in the past ten months, it has been very very hard for Nigeria's but going forward I believe that if these policies are still with a lot of sincerity of purpose Who see light at the end of it on it? I mentioned that that's what we want to have that light at the end of the tunnel to have That silver lining and you know all of these growing pains because I would like to call it our growing pains and Sacrifices that were making We would hope that you know it starts to pay off really soon not just at the end But really really soon at least in the next few months. We should just you know, just have some form of respite But anyways, we want to say thank you. This is where we have to wrap it up on this segment Thank you so much for coming and joining us. It was a pleasure having a conversation with you. Thank you Thank you for having me Yeah Okay, we're speaking with Muhtar Mohammed is an international finance and economic and an analyst and we've just been talking about the statement by the former deputy governor of the CBN God well Kintli Moghulu and we were just saying that you know having to think of the Naira being 400 to the dollar is just a dream Well, we hope that it's not going to be a dream for too long and so when it might just be a reality I mean I look forward to a day whereby we would see one Naira equal one dollar. That would be amazing All right, this is how we have to wrap it up on the show. We want to say thank you for having a breakfast with us My name is Vruma at Paulton. I'll see you again tomorrow. Have a nice day