 Welcome back. It is still business insight and plus TV Africa as we set an agenda for the incoming administration The administration is set to be on board in about 14 days or so and a whole lot is happening and Nigerians are wondering just how far They would go and what to expect from the incoming administration specifically from president-elect Bola Ahmed tinnable. Let's just give a bit of a background before I introduce my guests right now Rise in food prices and the lingering effect of cash crunch are eroding Nigerian's purchasing power as inflation heads to a new 17-year high but the central bank of Nigeria CBN said it has launched series of consultations and policy reforms to crush rate and boost Purchasing power now intelligence reports by many economic and financial firms Indicated that inflation may rise by about 50 basis points to between 22.5 percent and 22.67 percent in what may be the fourth consecutive Monthly increase. I have them joining me right now international finance and economic analyst Mokhtar Mohammed many things for joining me on business insights on plus TV Africa Thank you. Good morning. All right analysts seem to believe that Inflation may rise by about 50 of basis points to between 22.5 percent and 22.67 percent in what they have said they'd be the fourth consecutive Monthly increase. Let's start from that inflation rate is getting higher It is just galloping as it were right now. So if you were to advise the incoming administration What should we be working on specifically to look at our food inflation? I think food inflation is mostly cause because of rising cause of energy And when you talk about rising cause of energy then it affects The farm products that are moving especially in the right area If you look at the inflation figure It seems to be like the right area seems to have more inflation than even the urban area for some time now And that is because of the rising cause of energy. I won't talk about the rising cause of energy We're talking about where Petroleum product PMS especially has gone up in the right area. They pay almost 400 Never for PMS. And so that's for me is the biggest challenge Especially when you have a government that should be moving subsidy So what we should be thinking about if I were the government coming in there in terms of tackling inflation You need to look at the productive sector and how you can reject it and bring subsidy into that sector Now when I'm in subsidy into that sector I mean in terms of bringing social investment Not just subsidy when we talk about social investment talk about health care. You talk about education So if you are able to do that then what mostly houses spend on food and food They spend so much time not only on food on agriculture And also on health care. If they begin to have good health care at the cheaper rate That would reduce their cost of living and that also could help bring them inflation because I mean the money they have in their hands We'll be able to go further than what what they have now or basically to bring that inflation You need to look at cost of production And when you're looking at cost of production, you begin to look at energy costs again Especially when we don't have power. So definitely nothing they need to tackle to bring that inflation is power Then again, they need to tackle the exchange rate And differences is it's one volatility that been on for most eight years and this current administration Was only able to come up with one strategy one that was the import export window After that, this seems to be lost on what to to bring down this exchange rate. I think the income administration Will have to deal with that That challenge also So definitely to bring that inflation We need to think of the productive sector You need to think of subsidy and we're talking of subsidy. We're talking about subsidy in terms of building hospitals, social investment and good schools Where people don't have to pay for the children to go to private schools that will bring bring make them have more money but the major ways to solve Inflation now figure is to bring down the cost of production And we're talking about bringing down the cost of where you look at energy Especially that that is being used by industry that is diesel Fortunately, did it have moved from a height of almost 900 naira today selling for 70? So they need to still do more and that's a sector that have been deregulated They need to still do more in the area of investment and see when the competitive nature of that sector come in We could see price drop and that could help bring them inflation All right, uh, mokta I'm worried about our debt profile. I mean, there have been series of concerns in the past Couple of days are the budget office boss was uh in the knees and he also raised concern and all of that But 17 years after the Paris club relief, uh, external debt rose to a 41.8 billion naira and Incidentally, the world bank is saying that is insisting that Nigeria needs more loans to fund needs. How do we wriggle out of all of this really? Well, I think This administration got it all wrong When they started with debts in terms of building infrastructure Who were part of the people that was excited about it? But in terms of excitement was drawn that we're thinking they would do ppp public private partnership And whereby they just bring out those project brilliant upgrade for 30 years for 25 years Government will not be putting so much money on there They give half a tax bracket that companies able to employ people People will pay tax Now what we're looking at but what we saw was a government that was bent on just going to run the project themselves And so that is why when the challenges that we are facing now Now, how do you get out of this? No, there are only two ways you get out improve your revenue That's a short one. We improve your revenue Now when you look at our cash car house cash car is oil Now oil is suffering from a lot of challenges. The subsidy payment is there Now oil thief is there So we are not able to again move from there Then the next one you look at is okay. Let's go to tax bracket. Why did the tax bracket? Which is basically very good for you to widen the tax bracket Now you want to widen the tax bracket. How you widening the tax brackets one question? Are you widening the tax bracket to just have revenue to pay your debt? Or are you widening the tax bracket to have A use tax as a means of ruining your economy Then your people find employment they pay more taxes for you You are able to pay your debts. Those are the two ways Now the government really need to look at it especially the income administration Do we just want to widening tax bracket to end revenue and pay our debt or widening tax bracket using tax as a means to Get more people into our economy Pay more companies to enjoy tax holidays and they give our people more job Then from the taxes that are being paid by the people we use it to pay our debt then Looking at the oil sector. What do you do? You fight The oil thief what technology can you use to fight the oil thief? We need to know how many barrel of oil we produce a day not assumption We need to know it's not rocket science Then after you do that you look at the subsidy regime you begin to look at what type of subsidy that we pay Can we sustain this how also how sustainable this if it is not sustainable What are the polity what are the measures that we put in place to make sure that we bring investment into that sector Create competition into that sector and bring down the cost of energy into that sector and then remove the subsidy All right, all no rocket science, but you need the political way to be able to do it All right, Mokhtar because of time now, let's Leave up the fiscal policy for a bit of taxation and all of that Let's talk about our monetary policy because it seems as if we are not really getting our You know our ampere mpc rates and all of that, right? Let me talk about them the forex right now because i'm even alarmed that Nigerian Do you know obas in just time? Now each Nigerian was in about seventeen thousand eight hundred nine But the current administration now a Nigerian owes about them over three hundred and six eight Thousand nine if you look at our public debt before our forex regime right now The cbn over time under this administration came up with some measures You know to help our forex regime, but it's as though we we were having some sort of a policy mismatch or misplaced priorities or something because we're still not doing well when it comes to our forex reserves Right, you need to know where the forest reserve is coming. It's coming from And for the for throughout last year the nmpc only limited and intense of january and february after that They did not admit anything to the into the federation into the Federation account any longer. So how do we have forex because our cash car is oil So oil thieves they get reduced and then they came out with subsidy payments So that was that's one reason that's why we don't have the the green back in Reserve like we used to have it Secondly, uh, we you you you said it or the made it a policy the monetary policy I think they've come up with a lot of issues the rt 200 The only one that has work. I think it's the import export window that we're able to see The the the the results Instantly, maybe in one month or two months we saw the the dollar from a height of about 500 another Drop to 360 that we're able to maintain before kovid 19 and other things come up and then we are we are where we are today So in terms of managing that state, I don't think the only way you can manage that sector is to end more revenue Or then attract more investment and their portfolio or foreign foreign direct investment These administration have not done that remember that the monetary policy Committee can only come up with monetary policy The physical side need to come up with a strategy to attract foreign direct investment And then portfolio investors will definitely come in because of them portfolio investment Investors comes in because of the monetary policy But foreign direct investors will come in because of the physical policy But you could see that in this current administration Where portfolio investors would have come in because of the monetary policy they have challenged I have to do the the exchange rates differences between the parallel market And the government market and the physical side was non-existent as they also we didn't attract them So in all the means we are supposed to attract Efforts into our economy we don't we did not and that is why we have the challenge That we had I guess we still have a whole lot to discuss But we might need to do a part two of this time It's usually not our friend, but then there's still a whole lot to talk about You know in the the real sector the Manufacturing and all of that will do another take on that But I must say a very big. Thank you to you for joining me today. I do appreciate it My pleasure. Thank you. All right As we go now the event experience Africa, Texas has hosted major stakeholders event professionals creatives And business heads in the event industry since 2019 at the gun conference that sets the pace for an eclectic year As professionals in the event industry now since the global downturn texts resumed activities post covid in 2023 by hosting delegates from across Africa to an excellently planned and well executed conference a famed reset At least yes team was geared at encouraging and guiding their various stakeholders on growth Pathways profitability and access in new markets in the industry during a recession I'll leave you with details of that. So business insight returns tomorrow. I am Justin Akadone. See you again next time. 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