 Welcome back. Analysts say reviving the fortunes of Africa's largest economy is a critical challenge that tenable must immediately tackle head-on. Nigeria has debt of around US$103 billion and faces unprecedented levels of inflation, high unemployment and a heavy reliance on dwindling oil revenues, which has led to an exodus of mostly young Nigerians in a brain-drain crisis known locally as JAKBA or ESCAPE. Shergo Shokmito, principal partner Woodridge and Scott Consulting joins me now as we analyze the President's speech and the matters arising. Many thanks for joining me, Shergo, on this discourse. Thanks for having me. Let's start this way. In an automatic move by Macy, as the President announced that subsidy is gone, the effect kicked in. Panic buying, filling stations closed, pump price increased. How did that hit you, really? Well, you know, I mean, we had spoken about this before the immigration, during the campaign season and after. And I think the very consistent position hasn't changed. And I think that what would have seemed to happen as a reaction from the public, between yesterday morning and today is just the validation of what I've been saying. You will move your subsidy without creating a clear pathway as to how that will be mitigated, how the impact of that removal will be reduced as significantly as possible on the Nigerians. You have a crisis in your hands. So, of course, the first thing that happens when a President or any other government official that holds a very prominent role in any country makes a policy statement is that there will be an immediate reaction by the public. That reaction will have little or nothing to do with the actual economics of that matter. And that's what we've seen. So right now, the President has made a statement in his inaugural speech. And as a result of that, the all marketers, independent all marketers, especially, have reacted immediately. And it's a business reaction. It's not a political reaction. So what will happen is that statement by the President has created uncertainty for the players and the supporters in that industry because the replacement costs for the current holding stock has become unclear. So they will need to make decisions as to what they will do with that stock. Are they going to hold on to it, sell at current prices, and run the risk of not being able to replace that cost because the cash they generated from the current stock they have may be inadequate, putting them in a bit of a cash flow commandant. Or do they immediately hide their prices to try and mitigate the impact of the increase in the replacement costs should the President's pronouncement actually do kick in. And I think that's what we've seen. The statement by the NNPC will do absolutely nothing to assuage or deal with that reaction because the reaction is not a reaction to supply. We don't have a supply problem. The problem we have is a pricing instability problem that has been created by the number one man in his first speech to Nigerians. So it's a very brave thing that the President has done. I hope that they have a plan that will ensure that this doesn't snowball into a crisis. I hope that they have a plan. I hope they have a statement that they're going to make in the next couple of hours. It cannot be. This must be dealt with in the next couple of hours. Max one day or two days. They must come forward and tell Nigerians how this removal is going to be handled, the specific implementation process. I don't want to use the word palliative because I think that that reduces the importance and the implications of what we're talking about. I think that it's not a matter of palliatives. It's more about the alternative causes of action that the government will make to reduce the immediate impact on Nigerians. So we will hear from the government how this is going to be dealt with. But right now, in my opinion, that was, I think, an unnecessarily bold move. You know, he could have addressed that subject matter in a more sensitive way than to make such a categorical statement. All right. Okay, so let's just take me very quickly because of time. Let's talk about the high point of the inaugural speech economically. That is, he made lots of announcements as it was. He also talked about him house cleaning. He talked about the CBN's narrow redesign policy, how he was going to revisit. But specifically, he also talked about budget reform to stimulate the economy without engendering inflation. How possibly do you think he can go about this? Well, I don't think it's really such a difficult thing. I think we need to, there are two things. I listen to that speech with a bit of mixed feelings. On the one hand, he went into quite a lot of details about the direction that his government was going to take. And I think that's commendable. On the other hand, though, I think he went into two more details. I think that a speech like that should not be a manifesto reading speech. It sounded like he was reading his manifesto or his party's manifesto. I think a speech like that should have addressed the question of vision, the question of galvanization of national energy, the question of rallying. It should have been a rallying cry and a rallying call to citizens of a country that is suffering after what many would consider an 80-year nightmare. So his mantra of renewed hope is a good mantra because, you know, I think he was intelligently put together because on the one hand, he is part of the APC that promised hope and change. On the other hand, he's insane to renew hope that hope was dashed and we want to renew it. So for me, his speech should have been heavier on vision, on leadership, on direction, on painting an image and a picture of what Nigeria would look like four years into his tenure, which would then encourage Nigerians to say, look, you've done amazing. Let's give you another four years. But he didn't do that. He spent almost all of the time on that speech speaking about policy initiatives and policy, you know, direction, which is also good. But I thought that that should have come later, that should have come shortly thereafter. That speech should have been more of a rallying cry, you know, and a call to action for Nigerians. But having said that, the things that the president touched on in the speech, I think they were important. I think it's a good thing that he spoke about some of those things in the kind of detail that he gave. For example, talking about the GDP, all economic observers would agree that Nigeria growing at an average of about 1.3%, 1.4%, GDP growth over the eight years of the Bwari administration was terrible. Of course, there were two recessions in between that, but even in those recessions, you know, some would argue could have been presented or at least should not have been as bad as they were. So to have that type of growth projection, you know, growth achievement in a period when we're also growing, when our population was going at about 3% per annum was terrible. So to come out and only say that you would attempt to go and play, sorry, GDP at about 6% is good, but clearly we need to be doing better than that. If we say 6% in the next three years, for example, and then maybe we'll be trending towards 10% before the end of his four-year tenure, then that would be good, but it's a good start. He spoke about inflation, he spoke about the currency regime, and I think that is very important. The currency, this currency, multiple exchange rate policy of the central bank must stop. It is one of the biggest problems that we have had in the Bawari administration that has created a lot of multiply effects that trickle down into all sectors of society. So, you know, the president did address certain key policy initiatives from the economic standpoint that I think were good. His talk about agriculture was also good, you know, processing zones, ability to provide storage capacity and all of that was good. So we would hope that he would have the will to then go ahead and implement those things that he spoke about. What about his talk about power? Most Nigerians would actually want to see a change in the power supply. He said something about a power generation should nearly double and transmission and distribution networks improved. He also said they will encourage them states to develop local sources as well. Let's talk about that, Sherwin. Well, so on the power side, he deliberately having been very specific in terms of numbers and what we can hold him to in the area of GDP, in the area of jobs, spoke about one million jobs. I thought he was very deliberate about not giving numbers specifics that he can be heard to when he was talking about power. So he said generation would be doubled, at least doubled. What is generation today? The numbers that are out there is anything from, some people tell you, 9,000 megawatts, some will say it's about 12,000 megawatts generating capacity. And then he said transmission and distribution will improve significantly. Now that's very subjective. For a country that is trending, that has trended at about 5,000 megawatts of electricity distribution capacity, transmission and distribution capacity in the 20 years, 24 years of this republic, I thought we needed something bolder. It should have been as bold as it was with the GDP in talking about the power, because this is one of the biggest problems that we have. But it's a good start. I think he was deliberate about not being specific. So let's see how, I think in the first six months to one year of his administration, we know whether this is business as usual and more of the same, or whether there will be some radical decisions that will be made to improve the situation in that sector significantly. Okay, talking about tackling unemployment and of course social security, he mentioned working with the National Assembly to fashion and omnibus jobs and then prosperity bill. Let's talk about, he said the bill will give his administration the policies based on back on labor intensive infrastructural improvement in quite light industry and provide improved social services and vulnerable. Well look, when it comes to job creation, I do not know any government anywhere in the world that creates jobs. It's not the job of government to create jobs. It's the job of government to provide the enabling environment in terms of policy initiatives, in terms of regulation, in terms of the rule of law, for example, to ensure that businesses can thrive, to ensure that productivity can explode. When that happens, jobs will be the natural fallout. So the omnibus regulation that will be omnibus legislation from the National Assembly will wait to see the details. What exactly does that mean? Running infrastructure projects that are labor intensive, you know, how many jobs will they provide? How many jobs can they possibly provide? Infrastructure projects, where? How much funding does the federal government have? How can you speak about that and not address the revenue problem and the investment problem? Whether you're talking about foreign direct investment or you're talking about boosting the local investment appetite, you know, within the local economy. You can't speak about jobs, infrastructure and not deal with that. So I think this was rhetoric. I'm not sure. I think we just have to wait for details from him in the coming days to see how that will play out. Obviously that then speaks to the issue of cabinet formation and hitting the ground running as he has been saying. Whether he will hit the ground running or not will not be a function of the speech he delivered yesterday, to be a function of the actions he will take in the next two weeks. Okay, as we round off now, my final question, I still want to talk a little bit about him, the house cleaning that he talked about, the monetary policy. Because you agree with me that we've not really had it well. The MPC keeps on increasing the interest rate and the inflation rate is not actually friendly and all of that. He said that the central bank must work towards a unified exchange rate. He also talked about how it will direct funds away from arbitrage into meaningful investment in the plant, equipment and jobs that will power the real economy. But let's really talk about him, the monetary policy, the policy of the government. Now what should be the full cost right now in the next 100 days as we round off? I think one of the biggest problems we've also had has been the CBM and the CBM government. With all due respect to him, this person and anybody that might be offended. I think the policy implementation approach of this government has been at best erratic. There hasn't been any coherence between exchange rate policy formulation and implementation, interest rate policy formulation and implementation, and fiscal policy formulation and implementation that has been a disconnect in all of those things. So exchange rate is going in one direction, interest rate is going, the fiscal authorities are doing their own thing. We need to bring all of those things together and I think that's what the president means by a house claim. So as a starting point, this preponderance of an increase in the NPR rates to manage inflation must stop. I have been saying this since the NPR got to the region where we were 16 percent, 17 percent. The more you continue to push the NPR rates up, the more you are stifling production and investment. Because you are creating a station where access to credit by the sectors that need them is stifled. So that needs to be dealt with. I think so much. And be a bit more coherent with this policy formulation. Thank you so much. That's as much as we can take on this discourse. I would appreciate your time. Shagun Shokuto is a principal partner of the region's court consulting. He joined me to analyze the president's inaugural speech and how the effect would be on the economy. We do appreciate your time. Shagun. All right. That's the size of the show for today. Business Insights will return again. Same time tomorrow. My name is Justin Akadoni. Many thanks for watching. See you again next time.