 We're glad to know you're still there and watching The Breakfast on Plus TV Africa. And right now we're going into yet another issue that is really, really shaping our landscape, our financial landscape, our economic landscape, the Naira devaluation. Now it has pushed up vehicle duties by 40%. I have with me to talk about this for the next 15 minutes, Mr. Nick Agouli. Nick Agouli is a public affairs analyst. Good morning and welcome to the program, Nick. Good morning and good morning to Nigerians. Alright, Naira devaluation, that's the topic, Naira devaluation pushes up vehicle duties by 40%. Let me get your comments there before we go into specifics. Thank you very much. It's a very topical issue. But my view is that I don't really want to call what has happened. Naira devaluation, and the reason that I say this is this, before now there were two markets. If you wanted to buy the dollar or any foreign currency for that matter, there were two markets. There was a market created by the central bank, which is called the official market. And in that market, the central bank decided to fix the price of the dollar in the market. However, they came about the price that they fixed. It's only the governor and his team knows. And then there was a market where everybody could access to buy the dollar. Now there was a difference in the Babangida, sorry, I say Babangida, in the Bumari days. There was a difference in the price of the dollar between the central bank's market and the everyday, every month market of about 300 Naira. Because why the dollar was selling at 400 Naira plus in the central bank market? It was selling for 750 or more per dollar in the everybody's market. And when the president decided, or this current government decided that they were not going to allow the Naira to find its level, it wasn't the everyday market, that is the parallel market that tended towards the central bank's market in terms of price. Instead, it was the central bank's market that not tended towards the parallel market rate. That is to tell you that ever since it was the parallel market rate that was the real rate of the Naira, the real value of the Naira, what the central bank was doing at their offices was fixing the price. Fixing the price without even telling Nigerians what was the basis for the fixing. So the parallel market rate was the real value of the Naira. And now the dollar is trading at that real value. I cannot call what has happened as devaluation because the Naira has always been valued at about 700 and something Naira to a dollar in the real market. In that market that the central bank operated, only them know how they came about their price. So the Naira has not been devalued. Instead, this current government has only allowed the central bank to trade the Naira at its real value, which is 700 and something to a dollar. So that to me, that's what has happened. It has not been a devaluation but we have been, you know, spread with a price by the central bank for the dollar that was not real. Okay. But now it's trading about 800 and something to a dollar and it flocked to us anyway, but it has reached 800 and something to a dollar. I do not even know. Is this an advantage or disadvantage? Because at least some people could access these dollars from the bank for needs that they wanted to do at a cheaper rate before now. But right now, everything is equal. Is this a disadvantage or an advantage? You say that it's a definite advantage. It's a definite advantage for several reasons. The first reason is this. You will know that when the central bank was operating this market at the central bank and they were selling the dollars to some privileged people, you know, one characteristic of the market that the central bank was operating is that it is only the central bank that knew what to rate that was going to be traded in that market and fix it. But it's not everybody who could access that market. It's not everybody. So there were a few people who could go to that market and get dollars at 400 and something Naira per dollar. And then they just around trip those dollars into the real market, the parent market and sell it off at 700 and something Naira per dollar. And they were making an arbitrage of over 300 Naira without doing any work because you will just sit down and get an alert on your phone that the central bank has given you a million dollars and then you pay 400 million Naira for it. And then you just quickly call the mallam and then transfer the one million dollars to the mallam who now pays you 750 million Naira for it. And you became 300 million Naira richer without lifting the finger. That has now gone because it was our dollars, the dollars that Nigeria earned from crude oil sales that were being used to enrich a few privileged people. So that is a definite advantage. Now everybody will go get their dollars at the same rate. That is number one. Number two, now that the Naira is being allowed to trade at its real value, which is about 800 pieces of Naira per one dollar, if imports become too expensive for people because Nigerians have a penchant for enjoying foreign goods and services. Imagine something like education. Nigerians are leaving universities in Nigeria to go to the likes of Sudan. For you to go to Sudan, you're going to be buying the dollar so that you want to go to Sudan for education. Whereas there are excellent universities in Nigeria, one we can say that the public universities in Nigeria are almost rotten. That is not the case with the private ones. We have high quality private universities in Nigeria. And if the dollar becomes too expensive for Nigeria, who have this penchant of even going across to Benet Republic to go and study? They will now start patronizing our local universities. The same thing will happen with healthcare. There are very good hospitals in Nigeria and private ones that can attend to our healthcare needs. But Nigerians who love to go abroad, buy the dollar. The same thing with holidays. You will see people leaving to go to Disneyland and all of these places. If the dollar becomes too expensive for them, then of course, they can begin to think about Obudukatu Ranch and some of the other holiday sports that we have in Nigeria. That is the other advantage. The other advantage is the fact that as the Naira is now, like you say, trading at over 800 Naira to a dollar. It means that people can come to Nigeria and buy things cheaply and export them. That means you just bring $1,000 into Nigeria. It will become 800 and something thousand Naira. And you can then buy Nigerian products and then ship them so that you can make more money. So what is happening now is the return. That is, if you allow any commodity to trade at its real price, then it's better for the economy. Because at the end of the day, you will then discover that the monies, the billions of dollars that we have been taking from our external reserves to put into that central bank's market, we are saving it. And that is now going to be put into education, into healthcare, into road infrastructure, into railways, which everybody can enjoy. Not like the few privileged people who were trading in that central bank market that were the only ones enjoying those dollars. The crux of the matter is because of this happening, because of this, you know, not having two markets, two parallel markets, vehicles' duties have gone up by 40%. And that's just vehicles. I'm sure so many other things that are being imported have also gone up because of the volatility of the Naira right now and the position it is occupying against the dollar. So how do you see that? Is that also an advantage? Because to buy a car, you need 40% more of what you could have spent a few weeks ago. It's an advantage. It's an advantage because, you see, sometimes with doctors to make you work, they put a knife through your body and oppress you. There are some times that doctors can even amputate your limb. They can yank off your leg or hand because that is the only way to save you. So you experience pain. You are able to give away part of your body so that you can remain alive. And that's what is happening here now. I agree completely that a Naira at $800 plus to a dollar is going to hurt us badly. Anything that has to do with the dollar is going to rise at the same price. Anything that we enjoy that has anything to do with dollar, we're going to experience increased cost of that thing. Which is good for us. And the reason why I say this is that if the imported vehicles now become too expensive for people to buy, then they will not start looking at the vehicles that have been manufactured or assembled in Nigeria. People will start looking at the innocence of this world. And when people turn to the innocence of this world and then investors see that innocence is really making money in Nigeria or is really making money, then people will not put their monies in vehicle manufacturing or assembly. And as more and more people begin to manufacture and assemble vehicles in Nigeria, not only are the prices of the vehicles going to come down, but also jobs will be created. You know, a lot of our youth now, they don't have jobs because their jobs have been taken abroad. If you go abroad to go and buy petroleum products, that is jobs abroad that you are paying for. These 500 and something were paid for petroleum now. It includes the salaries that have been paid to people who are working in the refineries abroad. So we're taking our jobs abroad. If you buy Toyota vehicle now, the cost of that Toyota vehicle includes the salaries that have been paid abroad to people who are working in those Toyota factories. The same thing with even the food that were imported and everything. So if we no longer import, because it's not too expensive, we will not start looking into the local products and services. We will not create those jobs in Nigeria for our young people. And the more jobs we create in Nigeria, the more revenue the government will even make as a result of taxation, the more the companies are going to now boost this our economy. You know, so one thing however I advise the government to do is that we have always been preaching the fact that electricity is the lifeblood of every economy. And as the government is taking steps during structural reforms, electricity is good that the president has signed into law the Electricity Act. But they need to increase immediately Nigeria's electricity supply from the miserly, beggarly 3,000 megawatts to at least 10,000 megawatts in the next one or two years. And you will see how this Nigeria's economy will take off. And once we begin to produce locally the goods and services that we consume, then the dollar will no longer have impact on us. The more we produce locally, the less the impact of the dollar on our lives. And that will be the position we want to be. The problem, Nick, is that some of these things that you are enumerating, they should have been worked out before the things that are happening here begin to happen. Because right now they don't even have committees or anything that will look into these issues and bring solutions that need to be brought. Now, in the meantime, before they get to that point where we're going to get solutions, people will start investing in our economy and so forth. I'm asking myself here, what is it in Nigeria that is not dependent on dollar, even the Garida we drink, the rice that we eat, everything in Nigeria, except for instance, a farmer. Ordinarily, a farmer shouldn't be thinking about importations and exportations, or importations especially. But nowadays, except you want our grandmothers or people who are farming to go back into clearing the bushes with knives as we used to do in those days, to weed their farms with knives as they used to do in those days and look for ways of having fertilizer. If not, if you're talking about heavy sites, they are imported. If you are talking about selective heavy sites or the ones that will just kill everything randomly, they are all imported. And if, for instance, I used to give this example, a few years ago, a liter of heavy site used to sell for like 1,200 naira, now it is 5,000. So how do you expect that person to produce his yams or his rice and sell at a price that people can afford? So I'm thinking about the people between now and the solution time that may die, that may suffer really badly before the solutions are brought to bear or are brought to us. So what are the low-hanging fruits that we can pluck now as a nation to make sure that this suffering, the gap between the solution and this problem that we are facing doesn't consume a lot of lives? Yes, I agree with you that the pains are much. The pains are much because, first, if your price, if petrol price, increased by nearly 200%, that is hitting Nigerians very badly. And then the dollar increasing in price, again, is hitting Nigerians very badly. Again, electricity tariff is about to increase, import duties is increased now. These are all going to hit Nigerians very badly. But you see, for a long time, we have been having an economic policy that did not make sense. Why I say this is this, if your currency is weak, as in like Naira is 800, you count 800 Naira before you get $1, that helps you for your export trade. It means your goods and services are so cheap, people now come to buy. But for a long time, the central bank has been making the Naira to be strong for an import dependent economy. It didn't make sense. This is not economics at all. That a central bank whose economy is so import dependent, like you have mentioned now, that even farm imputes, you have to import the pharmaceuticals, machinery, all of that. Why would a central bank for a long time be using her external result to strengthen their economy? You don't strengthen your currency. You don't strengthen your currency if you are import dependent, because that means the cost of your import will be, you know, so this government has come in and they are taking steps to correct all of this. The kind of sham economics that we're doing, they are correcting this. Now that the Naira is trading at its real value at $800 Naira to a dollar, you asked about what are the low-hugging foods? The low-hugging foods are these. Number one, as the government took the bold step to kind of increase the price of fuel to near-market levels, the government has to work immediately on two things. Number one, they need to, in the very short term, as seen like today, issue import licenses to people who can bring in petrol aside from the NNPC so that there is true competition in the sector. The 500 and something Naira will buy now is NNPC price. And NNPC, we all know, is an inefficient organization. So in that price is the inefficiencies of the NNPC. You know, so other private operators also come in so that we can know the real price of petrol and pay for it. But also immediately within the medium term, they have given six licenses of NNPC. They have given six licenses already. Dangote is one of them. Dangote that has a refinery that has been commissioned to produce fuel. He's one of the persons given this license. The five others in the reports I have read, I don't know them. They are unnamed five people. The report is always six people have been given. But we know for a fact that Dangote is one of them. So licenses have been given. And they say those are the people who are ready to bring fuel in July. So others, anytime they are ready, they can also have. So in fairness to them, they have given licenses even though we would have loved to know who else was given this license, let's know. Because if we don't know them, it means that it could be just Dangote as usual that is having the monopoly until he's ready to produce his own fuel and sell. But maybe we'll just, I don't know. Licenses have been given. And that's what I wanted to point out. To six people, six companies. You are very correct. The news is out there that they issued six licenses. But for me, I don't trust the process at all. Number one, like you rightly said, why would they shroud in secrecy the companies that they have issued this license to? They shouldn't. Number two, they should open the space. Why only six? We need about 50 to 100 licenses to be issued in the first instance. So that there will be true competition in the sector. Who give licenses to only six people, they will fund themselves into a cattle. And a cattle will fix the prices. Because they only need a fund to talk to each other and say, today, let's all sell at 540. And all of them will be selling at 540. The company needs to open this market just like we're talking about vehicle duty now. Party can go and import a vehicle, bring in paid duty and sell it. That's why you see all sorts of car dealers selling vehicles at the price that they have agreed between themselves and the buyers. And that's what we call market forces. So for me, the government took a very bad decision in terms of the licenses. And they need to correct their steps. If President Thinibu or his handglass are listening to us, they should not carry on like before. Because these are the kind of things that were happening before. They are a new government. They are promising change. Something like this license. They need to be very transparent to who they gave it to. And they need to give the license to, in fact, they need to open the space so that anybody who is able to go and find Petro to bring it in and sell it and as they are fighting for market share, so the price will be falling. And that will be the advantage of Nigeria. But they have to deal with the refinements. I have not heard this government, although the government is just about a mountain of it. I have not heard them start talking about the refinements. They have to start talking about the refinements. The refinements should go immediately into the private sector so that those people can fix those refinements. And they will not be producing our crude oil, I mean our petroleum products here in Nigeria. Then we are not going to be talking about the dollar to go and buy petroleum products again. The electricity is another low-hanging fruit. That has to make up what is not going to lift off this economy. And this government should not stop at sending the electricity out. Because as we speak today, is the federal government that owns the electricity infrastructure? And transmission, for instance, is a clear bottleneck. The government should just weed that out now. I want to hear the government take this major step so that the economy will be boosted. Once the economy is boosted and we are not producing the goods and services we consume in Nigeria, the dollar will no longer have impact on our lives. Okay. Well, thank you so much, Nick, for a wonderful insight into the topic we're talking about. Well, you have said that there are advantages. That outweigh the disadvantages. And then we just need to tighten our belts for a little while. Well, Nigerians are listening. Nigerians are watching us. And we'll see what we can do. In the meantime, I would like to say thank you to you for coming on the show this morning. Thank you very much. And Nigerians, let us just keep strong. It will get better. Yeah. Okay. We've been talking with Nika Gule, public affairs analyst who joined us from Abuja this morning. And we're talking about the fact because of the condition of the Naira, the import of vehicles has gone up 40%. Okay. We'll take a short break. And when we return, we'll be looking at our second hot topics. Stay with us.