 You're welcome back. It's still our Nigeria we're talking about on the show today and what is happening or is likely to happen to our economy. Right now we know that there were complaints that the federal government had, through the ways and means, borrowed more than the limit that they were supposed to borrow. And people were saying this thing should be corrected. But instead of that, the Senate has increased the federal government's borrowing from 5% to 15%. So we're going to be talking with an international finance and economic experts here in Lagos State and the person of Mukta Mohamed who will help us make sense out of what is going on and the implication to our economy. Mukta, good morning and welcome to the program. Thank you so much for coming in. Okay, so 5% to 15%. When there was an outcry that the federal government has arbitrarily taken too much money from the Central Bank of Nigeria or through the ways and means, we were expecting that that would be corrected. But instead of it, it has been jacked up to 15%. Is that a good thing for us or a bad thing? Depending on which side you are, if you are in the side of the government and the Senate, is a good thing. If you are in the side of the masses, then it's a bad thing for you. What does that really mean? You have to ask yourself why do they have to do this fire brigade, make sure they pass it into law. But we are not yet sure if the outgoing president signed it before he left office or maybe is the incoming president that we signed that. We are waiting for that. Or from the filler we got the detail because they realize that if they don't do that, their allowances, what they call their exit bonuses and allowances will not get it because the government seems to say they don't have money on their own. So let's hopefully hope that the incoming administration will put an end to that. Okay but what are the implications on the economy? If this continues and they go ahead and sign it into law, if it has not been signed into law already, what is the implication on the economy? Big implication. We are looking from 5% to 15%. And if you remember that Amor is the federal government from CBN about 2.0 something. So by then you adopt that by 10% you realize they are adding more than a trillion into that. And that also will increase our debt profile. That also will flow inflation because the reason why CBN have not been able to tackle inflation is just because there is so much liquidity in the system and this liquidity is driven by the ways. Because some of these borrowing are not spent on productive ventures. They are spent on salary and allowances and so definitely they add to the cost of governance which in turn does not add in terms of productivity. So it's not a good thing for us. We are already overborrowed. We are already running at the budget deficit. We are already running a country that has been 97% of its revenue on debt servicing. So it's not good for us. But again, the good thing is that is the CBN is also an arm of government or is uncle Pasito of government. So what they tend to do, maybe they tend to do pro-noxious notes whereby they just give people notes as this and say you know you may not be able to spend it till after 5 or 10 years. That could just be the only way that government will be able to pay this debt that I collected from CBN. Now about if the present administration fails to sign it or fails to go through with it, what other alternatives are open to this administration to get money to fund whatever thing they want to do? Well, the administration has hit the ground running based on pronouncements. So hopefully we'll begin to see much action with your pronouncements. And so number one, if you are moving for a subsidy, you are getting almost 4 to 5 trillion in that sector alone. That alone is half of the budget deficit that we are suffering already. So definitely we expect them to widen the tax bracket and in terms of widening the tax bracket, we are not saying tax already tax. We are only saying that maybe you need to begin to find creative ways to get money from the informal sector. That again, that's on that way where they can have money. They can also look at the cost of governance and look at the an Australia report and also say look, we have to reduce the cost of governance also. So definitely I think if they do these three things and remember that the moribund, perhaps maybe a handful of governments, especially in terms of the refineries and others, we're hopefully thinking that this administration will do it with them by privatizing them and selling them to private hands. That also brings money to the cover of government. So they see other means of having money without borrowing and also they look at the infrastructure project. What sort of type of infrastructure project do they want to embark upon? And so if they look at this infrastructure project, they could bring the PPP, whereby they give them the build and upgrade for the next 25 years and enjoy tax bracket and also create a private fund. And so there are a lot of ways, creative ways, that this government can have money to run their field of the nation. You mentioned field subsidy. We talked about it earlier with my other guest, but we cannot overemphasize on this. You talked about it being something that will free off some cash for the government to do things in other places and all that. But now that the subsidy has been removed and then we are going to face a partial monopoly in the oil sector where you have a private individual running a refinery and dictating the price of the commodity in our market and all that. Do you think removal of this subsidy, we are going to see the impact on the people soon enough? I think when people say monopoly, monopoly, monopoly, obviously is there any other person that wanted to compete that space that was not given licenses? I remember that licenses were given to pre-mortulary finalists. Some mortulary finalists are working, but most of them are just working in terms of diesel. And why they went to the diesel side is because they realized that the petroleum sector was largely not privatized, they have it deregulated. So they went to the sector that is not deregulated. I mean, the petroleum sector was regulated as per PMS. So most of the mortulary finalists that we have now, they decided to do something on diesel alone because that space is not regulated. So definitely, Dangute took a risk and now the government is saying, look, we are moving subsidy. Not because of Dangute, they are moving subsidy. Remember President Goodloggy Village, you know, that attempted to remove subsidy too. And these correct people in government were the ones that fought against it. Now that they are there, they are seeing what it is like and they want to remove subsidy. So subsidy is not about Dangute, but it's just that it's happening at the time that Dangute took the risk and said, look, I need to build a refinery. And remember that most of these funds that Dangute collected are not only from Nigerian banks also. So, the mortulary finalists are there. So if you say you are not deregulated, you are no more regulating, there are a lot of mortulary finalists who come up. The member again is not doing anything. It's not the PMS in the public. The PMS belongs to the people of Nigeria. So that's not mortulary. And again, when you talk about mortulary, you need to... Government being asking people to come and collect licenses to build refineries. So for me, I don't want to agree with the extent that you are giving one person a mortulary. Remember, again, government are giving money for the tonnour and maintenance of what are called refineries, warrior refineries. So it's the end of the government to mention the refineries are working and they're also becoming competent. So for now, we can't be saying, oh, monopoly, monopoly. We need to look at the bigger picture. Somebody have started it in others. We followed that one in the cement sector. At the point, everybody said Dangute was monopolizing that sector. But today, there's a lot of players in that sector. So that's the way it starts. When we started the telecom space also, it was when people felt that MTN and the economy were monopolizing that sector. Until we had glue and others. And it became a game changer. So it's a process. And I think with Dangute on-stream, what kind of people will come up on-stream? And when you're on-sourced and when you see that sector being determined by market forces, a lot of people will be refineried. Don't be surprised when you begin to see the AIO majors like Shell and Vota and others begin to come up with refineries also. Okay, but in the meantime, before other people are ready to take the risk which Dangute took, now he's about the only one in that sector. Before that time comes, what do you think in your opinion should the government do immediately to make sure that people don't plunge into more suffering than they are already experiencing? Because just these two days, it's enough suffering on the parts of the people because they can't see fuel to buy, they can't see vehicles to take them to places of work and every other place that they need to go. And so many other things have happened within this short space of time. So what are the palliatives you would suggest for the government in the interim? Well, the palliative for the government in the interim is for the formative, in the interim is for the swim interactions. Subsidy will be removed. Subsidy to be shut for subsidy was made to the end of June when it's in the month of May. So there's no reason for the big party or the college party. Most of these finance funds are in now. So I think it's all about regulators. The regulators have their big stakeholders that are trying to take advantage of Nigeria's. And some stakeholders are already in the current status, saying that look, I'm going to revoke your CO4. I think we need to know that it's regulation that is the challenge that we are having presently not basically because of subsidy. Everything in Subsidy has been removed as well. All are great. We still have probation for it in June. NFC have not come up with the time. They are the only ones that are important in the production of the nation. They say they have enough of that quantity for us. They have not put a new price tag on the petroleum price already. So they say a lot of... So what we have seen, I think most of the private independence market are taking advantage of Nigeria. If you realize, the major market as I stated were 185 Naira per liter, especially in Lagos and Abuja. But what we have seen is that the independence market as wolves have also been practicing this for a very long time. And the 174 are 300, 400 and 500. So there is all about regulation. And I think the regulatory authorities should move more and they reduce the suffering of Nigerians. And if you are talking about where finally we will move Subsidy, what are the benefits for us? There is a lot of benefit in the long term. When they shut them, you have to bear the pain. There is a saying that says no pain, no gain. I think that's where we are as a country now. Okay. Well, thank you so much, Mukhtar, for coming through for us. And we do hope that you will have a wonderful day. Thank you so much. My pleasure. Okay. We've been talking with Mukhtar Mohamed, International Finance and Economics Analyst here in Lagos State. And he was trying to help us understand what is happening in the way they see the federal government or the Senate rather has raised the borrowing capacity of the federal government through ways that means from 5% to 15% and other issues related to the economy. We'll take a short break and bring the weather report to you. And then after that, we hope to bring you sports.