 You're welcome back. We're now going to bring you something else. And we're talking about inflation and how high interest rates spike, spike sales and rent by 40% in major cities. In fact, in Lagos state is more or less like 300%. I know of someone very close to me who lived in a house that he used to pay 400,000 and just about May this year or April this year, the landlord came and said it has to be 600,000 from 200 to 600,000. And they were just begging for this rent to be at 400,000, from 200,000. That means it's a 100% increase, not 40. So if in some cities it's 40%, then, well, that city is still a very, very good city. But in Lagos state, so many landlords have increased it 100% and that is worrisome. So it's interest rates and so many other things are going up and up and up. And to discuss this with me is Mr. Nick Agoulet, Public Affairs Analyst. Good morning and welcome to the program Mr. Agoulet. Good morning and welcome Mr. Agoulet. Good morning to our viewers. So now we're looking at inflation, high interest rates, and we're looking at the fact that rents have gone up 40%. This is the official figure of 40%, but practically it's more than that and so many other things are going up. Let's take your thoughts on what is happening, inflation and especially high interest rates in Nigeria. Will that take us somewhere better or it is taking us somewhere backwards? Thank you very much for that question. That there will be inflation in Nigeria is expected. Expected because of the policies that have been backed upon by the current government. Every step that this government has taken is inflationary or we have negative impact on inflation. Number one, the government increased the price of petrol from 180, 190 to 600 plus today. That's inflationary. That is going to cost inflation in the country because petrol impacts on so many things in this country. Number two, government floats the Naira. Meaning the official exchange rate of the Naira moves from about 450 there about to 800 even try to touch a thousand or touch the thousand and it's floating at around that 800 mark now. That is inflationary because Nigeria's economy is heavily import dependent and if the cost of the dollar rises by such quantum you expect that the price of the imported goods that we bring into Nigeria are going to rise. Government under the central bank of Nigeria increased the monetary policy rate to 18.75%. That is also inflationary because businesses that assessed credit will experience an increase in their interest cost and they are going to try to transfer this extra cost and interest into the prices of the goods and services that they produce. So that is also inflationary. So you can see that so far everything that this government is doing is inflationary is causing negative impact on inflation and so it's not surprising that the housing sector is experiencing inflationary pressures. Like I said, will it lead to a better Nigeria or is it taking us backwards because the government that is doing all these things they are telling us that they are taking us to a better place. Do you believe that? There is nowhere in the world that inflation takes anybody to a better place and that is why central banks across the world once they see that their economies are facing inflationary pressures they begin to take action to deal with that because the inflation is like a cancer because if you are paying the worker today 30,000 minimum wage and the 30,000 can buy them a bag of rice if you still pay them the 30,000 next month and a bag of rice increases in price from 30,000 to 45,000 then that worker isn't going to be able to buy a bag of rice again he can only buy probably half a bag of rice so that is the impact of inflation it eats into the purchasing power it brings poverty because the money that people have cannot fetch for them again the goods and services that it was commanding so inflation is a bad thing and for any responsible government once they see inflation they have to start taking actions to deal with inflation unfortunately the Nigerian government so far has been in office from May to Death they have taken all the actions that have been increasing inflation but they haven't taken any action whatsoever that would deal with inflation because to deal with inflation you have to understand what is the cost of this inflation and Nigerian government approach to dealing with inflation under the central bank of Nigeria is to hike the interest rate that is the medicine for demand-pull inflation because in demand-pull inflation the people have a lot of money money is floating in the economy and you want to mop up the money from the economy so that the people will demand for less goods and services and by increasing the interest rates it will attract them to go and deposit money in the bank so that they can earn high interest rates and that contains demand so that's how you deal with demand-pull inflation by increasing interest rates when Nigeria's inflation is cost-push inflation Nigeria's inflation is not demand-pull inflation because if you look at it in Nigeria only a few people have money the vast majority of Nigerians don't have money today we have millions of graduates for instance they've gone to school they've burnt the midnight candle but they cannot get jobs to work at any living and a lot of people who are even working there are not any good wages that can even take them home but there are a few people in Nigeria who have a lot of money they don't go to the market always so you can see that the inflation in Nigeria is not demand-pull inflation it's cost-push cost-push in the sense that if the cost of imputes into the manufacturing sector is rising the manufacturing sector will try to push the extra cost into the prices of goods and services and you can see that because a lot of manufacturers in Nigeria are importing their imputes they are importing their spares and all of that this exchange rate depreciation is what has now led them to increase prices of goods and services in the same way even the interest rate that the central bank is increasing is inflationary on its own because when you increase interest rates those who were assessing credit into manufacture because the credit is now more expensive they will transfer their attempt to transfer the cost of the extra interest charges into the prices of goods and services so you can see that in Nigeria because inflation is cost-push the government should rather be dealing with what are the causative factors that are leading to this increasing cost of goods and services and not about increasing rates and the causative factors are there the causative factor is electricity if you don't give enough electricity to the economy the manufacturers are not using generators and you know if a burning generator at a diesel cost of 800 Naira or so that is very expensive actually it's not sustainable and that is what over time as we continue to give 3,000 MW to an economy that ideally needs 200,000 MW a lot of manufacturers are closing shop and live in Nigeria we recently had the case of GSK and all of that they can count the reason why they are living in diplomatic terms but you know that the environment to do business is very bad so government should have been quickly dealing with the causative factors what are they doing about inferno rates what are they doing about electricity what are they doing about high interest costs this is the president in his inaugural speech on the 29th of May he identified the high interest rates as being inimical to economic development and he said he's going to do something about it but unfortunately in his government the central bank had a monetary policy committee meeting and increased the interest rate the president didn't say anything about it so until we deal with the causative factors of inflation we are not going to cure it interest rate hike will not cure the inflation in Nigeria because it's not demand for inflation one of the factors we mentioned in this topic is the rents that have gone up not just the goods and services out there but the rents have gone up so much and some people are saying there need to be some kind of regulation for rents for accommodation for wherever people live and it seems to be working in other countries but in Nigeria there's no form of regulation at all it's left in the hands of the harmonies and all the people that give you houses and charge you exorbitantly apart from just paying your rents you still have to pay agency agreement, damages and all that and that runs into a lot of money and all that so what do you suggest be done in terms of accommodation in terms of rents how can the government step in so that the people don't stay homeless because right now a lot of people their options are either you go to, for instance in Lagos you go to Ogun state or any other neighboring villages to live and be coming to work in Lagos which is also very stressful for anybody that needs to work in Lagos state so what kind of regulation can the government give in that sector we also support the government to regulate the rents that landlords are collecting because any time the government attempts to regulate the price of a product you see racketeering that is what government attempted to do all these years with petrol price they tried to regulate the price of petrol and once you start to regulate the price of a product you're not going to attract investment into that sector what you do is to allow the sector to play out there is high rent now because the supply of housing in Nigeria is way way too low compared to our population of 200 million people there are not enough houses so what government should be doing is to take action to increase the number of houses available for people to rent in Nigeria and there are the number of measures they can take number one we're talking about interest rate if you want to take a mortgage today your interest rate is going to be topping 25%, 30% who takes such a mortgage ordinary SWA mortgage is not more than 5% mortgage is not more than 5% interest rate so if the government takes this step to say for mortgage purposes or for housing, for building of houses banks are not supposed to charge interest rate of more than 5% then we have better impact than trying to regulate the price of getting a house which is the rent you see there is a problem in Nigeria you know how the problem in Nigeria is the banks in Nigeria are having a free day because SWA in any economy it is the banks that are the catalyst of the economy because the banks are the ones that supply cheap credit into the economy which boosts economic activities but in Nigeria because we have been having this idea of appointing central bank governors from the commercial banking community these central bank governors coming and do the bidding of their community which is commercial banking because you see what is happening in Nigeria is that if you take your money to the bank to save the bank is going to give you an interest rate of 32%, 3% if you try you get a 5% and then when you go to borrow money from the bank you are seeing interest rate of 30% imagine from 5% that they are paying to the person who brought the money to 30% to the person who has come to borrow the money 25% and that is why the banks in Nigeria keep declaring humongous profits even during the time of COVID they were declaring humongous profit and allowed to do as they like a responsible government will say this don't charge more than X amount of interest above the interest you are paying on savings so if a bank is paying interest on savings of about 5% then you give them a spread of say about 3% to 5% max that means any loan that that bank gives cannot be more than 8% to 10% that is what you do and once we now have this single-digit interest rate in Nigeria you will see more people borrowing money to build houses whether for themselves or for commercial purposes and that is where the supply of houses in Nigeria will start increasing and the more houses that will supply in Nigeria the less the rent will become the other thing is that in all cities in Nigeria go about in all cities in Nigeria you will see humongous housing projects that have been left there finished but nobody is living in it perhaps the people living in it are large cockroaches and probably snakes why will government not pass a law to say that look if you don't occupy your house within a set time period maybe 3 months or max 6 months that house is going to revert into public custody and we are going to put tenants inside that is the only way you can deal with because there is no one in Nigeria to be living in squalor when in the same country you have houses that are not being occupied look I will give you a good example if you go to Abuja on your way from the airport I think this is Constitution Avenue there are thrones that are coming from the airport into the city of Abuja one is Constitution Avenue the other is Independence Avenue I think it is the Constitution Avenue when you pass National Hospital you are going to see these two high rise buildings they are the tallest buildings in Abuja they are called the World Trade Center I have been seeing those buildings for the past 5 probably 8, 10 years nobody has lived inside there is no sign of anybody living in those buildings why will the government of Nigeria allow something like that you come to the Nigerian land you build a humongous housing project like that and just leave it why Nigerians are living in squalor so that is one thing the government can do the other thing the government can do is what you have said now let the government start improving on the public transportation system including the rate you see with rate people can live in a padau people can live in a kure people can live in a even in a neighboring state and work in Lagos because look you can get on a train on Moray within 15 minutes on this first train you are in Central Lagos you are right there on the marina or you are in Ikeja you just step down work to your office do your work and then you come back enter the train within 15-20 minutes you are back to where you are in Wondo State you understand so that is what you also do meaning you decongest the cities so people live outside and they go in and they do their work so these are some of the measures that government can take to deal with this matter these are fundamental measures but simply just going to strangulate landlords and say you cannot charge X amount of rent I mean look at how much the dollar is now if I import building materials at high cost and build my house then the government is coming to tell me that you cannot charge rent up to this amount that will not work that will discourage investment and exacerbate the issue instead of throwing it it's going up well that's what some people have said is the fact that there is this new awareness of developers they come to buy your house they develop it into something really magnificent and the rents will go up and no housing for common men should there not be a deliberate policy of government to provide housing for the people because it doesn't seem as if government is doing much in that sector what they do is build some houses and then sell it to the people that can still afford to build their own houses for instance you build a two bedroom flat and then you're giving it out at 25 million how many people will have 25 million to buy those houses it's the same people that can build their own houses independently without having to take from the government those are the people that still come to buy so shouldn't there be a deliberate policy of that or do you think there's going to be a challenge if the government wants to embark on that there has to be a deliberate policy of government that is why we have ministry for housing we have ministry for housing to do specifically what you are saying now let me answer your question in two parts the first part is that you talk about you build a house that is worth 25 million how many people have 25 million to buy the house and that is precisely where the government needs to come in the government needs to come in to make credit cheap so that people can take mortgage and buy houses if you are a worker and you buy that house of 25 million with a mortgage instead of paying rent you will now be paid of your mortgage so that at your retirement the house belongs to you but if the worker is unable to assess mortgage and buy that house there are only two things he can do is either he will continue to pay rent until he retires and he has no house of his own or he will try to steal money and buy the house for 25 million which is what fuels corruption in Nigeria so the government must by deliberate policy ensure that there is cheap credit especially in the housing sector so that those who are building the houses have access to cheap credit those who are buying the houses have access to mortgage so that they can be paying their mortgage of instead of paying rent if you do that then there will be a boom in the housing sector we need a lot of houses to be built and a lot of demand for housing will be there because those who ordinarily will not have 25 million to buy a house will not be able to buy a house in mortgage facilities that is number one number two you will look at an economy like the UK government as I speak to you today is still supporting the people with housing that is what you call social housing so if you are a worker and you are on low income the government helps you with your housing costs and if you fall out of employment and you no longer have money to even pay rent the government provides you housing in that UK in fact there are people in the UK that are living in hotels on the bill of government why because the government is yet to find a house for them and their families so the government checks them into a hotel which is how responsible a government can be to its people so for the Nigerian government to have a ministry for housing to have a central bank there to have all these ministries and they are not doing anything to support Nigeria to have their own houses to own their own houses to boost the housing sector is grand failure and we expect the current government to do things differently okay well let me use Lagos again as an example Lagos doesn't seem to have enough land for housing and I keep wondering why high rise buildings is not a thing in Lagos where government will come in and build houses very very high rising houses and get accommodation for a lot of people some people say there are challenges if you have to have buildings like that for instance like you have in New York so the solution in Lagos now is to fill every fillable place if I may use the word fillable in Lagos state which also poses a danger for flooding a danger for being submerged in maybe the next 30 years some parts of Lagos state because they are practically doing everything on water on the sea on places that they are not supposed to do that what are those challenges that you see in Nigerian cities that they cannot go to high rising buildings they are just doing small things everybody if you have money you go and get land and then you build your houses and then the land is no more there for other things to be done are there challenges that the government cannot address Singapore is a case study here I have been to Singapore several during the course of my time working for International Work the country is what you call a city state so as you see Lagos Lagos should have been the city Lagos should have been the country that Lagos should have been the country Singapore is a city and Singapore is a country they don't have any land Singapore does not have agriculture because they don't so if you go to Singapore almost every building in Singapore is a high rise building almost every one of them and after they have finished building up high rise they are not building down so you will go to a building in Singapore and you will see 10-15 floors underground 10 floors underground in Singapore and that is the kind of thing we also need to do because even as Nigeria has land we cannot continue spreading buildings on our lands because we need these lands for other purposes like farming you know so the reason why you are not seeing those high rise buildings in Nigeria I believe is because the people don't have the capital to build such high rise building building the high rise building is a different program compared to building a flat and that is why those who don't have the capital they attempt to build high rise buildings and we have been seeing cases of building collapse in Nigeria you know and only come if the government takes the steps that I have earlier initiated to enable cheap credit to be available to the housing sector so that people who have the interest to build houses to are good we seem to be having some challenges with Nika Gule right now the audio quality is dropping and fast too so maybe we will have to discontinue with that but we were talking about the fact that there has been a spike in prices of commodities and then rents as well because of the high interest rates in Nigeria you go to the banks you want to borrow some money the interest rate is not only two digits but up to like 30% of interest that will be put on the money that you are going to borrow which is very very sad for all of us because farmers need money to do their farms people need money to build houses go to school and so many other things money that you may not be able to get immediately and you run to the banks and you cannot get anything they are now like POS operators at the time of cash crunch you know where you go you get 5000 Naira and then you pay 2000 to get 5000 in some places 2.5 even to get 5000 Naira that's how the banks are operating right now with such kind of interest it is difficult for anybody to go to the bank and so like Nika Gules said the only option left for you is to cut corners and make sure you make extra money so it's either you are not dedicated to the work for which you are paid you want to do some other things because everybody talks about a different or many streams of income right now and you are working full time something that should not give you time to do a lot of other things but your salary is not that much and so what do you do? you cut corners you do some fraudulent things while at work or leaving or neglecting that work to go and do something else that will give you money that extra money that you so need if it were possible for people in Nigeria to be sure that whenever they are ill or their people their loved ones are ill they go to the hospital they get treatment they know that if they want to go to school they will go to school without any problems they know that if they want to travel there is that transportation system that will take them like Nick said you can work in Lagos but leave in Akure because you have the trains that are working and all that people will not even be talking so much about salaries because I mean what are you using salaries to do? well we do hope that the government will look into the matter and make sure that the interest rate comes down to one digit even if it's 9% but let it be one digit as against the 25-30% that you find everywhere else and you know there are some people that as individuals will loan money to the people and charge less than that maybe you can collect like 50,000 Naira for a planting season I see that happening a lot in villages you collect 50,000 Naira to pay 70,000 at the end of the season a season sometimes takes like 5 months for rice season or yam planting season or cassava season and everything else so well Nick are you back? we couldn't hear you anymore yes back are you hear me? yes I can hear you now please continue with your thoughts before we wrap up let's go back to what you were saying Singapore is now building down yes so I was saying that the people who have attempted to build high-rise buildings in Nigeria because you rightly raised the point that why is it that we are not seeing high-rise buildings in Nigeria and I say that the reason why we are not seeing high-rise buildings in Nigeria not to build high-rise buildings but they have stopped that now people are building high-rise buildings there now the reason why we are not seeing that in Nigeria is access to capital building a high-rise building is an expensive venture and the capital is not there because like you rightly said and you were discussing in your own analysis the interest rates are too high at 25% 30% there is nothing that is going to happen in the economy because it can't survive but that kind of interest rate so people who have attempted to build high-rise buildings in Nigeria you see the incidence of a building collapse because with that adequate capital they are not trying to cut corners they are not putting sham projects in place and that is coming at high cost of life and the money that has been invested lost so definitely Nigerian government needs to support the housing sector we cannot have a ministerial housing and then that ministerial housing is doing nothing also it shouldn't be that the ministerial housing is not going to go and build their own houses any time government builds houses I have seen the evidence of federal local housing projects in Nigeria that were never occupied by anybody they build these houses, they keep them and the houses rot in situ where they are what the government needs to do through a ministerial housing is to create a neighboring environment for people to build houses whether they are developers on commercial basis or their personal houses that they want to build then build their own houses and that can only come through cheap credit in the sector and they also want to buy their own houses they should buy their own houses with mortgages if a worker buys their own house with a mortgage instead of paying rent they will pay their mortgage over time after 20-25 years the house becomes their own so they are retiring into their own home this is the simple thing that needs to happen and I was hearing you in your own analysis and you were very right in terms of your analysis because let's look at an example of the UK I talk about the UK because I live there too so I am a participant, observer I experience an economy I am not talking about theory this is what I am experiencing because I have a residence there in the UK you have rightly said it workers in the UK they paid nothing for head care after their salaries because the government is providing head care at the primary, secondary and tertiary levels for free for everybody the people in the UK, the workers in the UK they paid nothing for education because government is providing education for free all the way to high school it is only university education that is paid for and if you don't want to pay for it the students have easy access to student finance where they can finance their education and once they take student finance they don't start repaying it back until they start any money at a particular threshold if so that student doesn't start work they will never pay that loan the people in the UK are enjoying security from government they don't have to employ their own regard or bring their own security or have vigilance government is providing effective security for them the people in the UK I can tell you now that children travel free on public transportation and senior citizens that is those who are I think 65 years and above travel free on public transportation there are many other things that the government is providing that is making workers not to pay for out of their salaries and then workers have this cheap access to credit on mortgage rates that are less than 5% to buy their own home this is how you create a neighboring environment for your citizens to enjoy life we are all in this country for just a few years not more than probably 100 years and why would the government allow Nigerians to suffer so much each day of their lives the current government they may promises they must live up to those promises we seem to be in a time where we pray for everything you pray that in the morning or in the night there will be light all throughout you pray that the roads will be good and safe you pray that you are going to be paid your salary we pray everything in this nation is prayer, prayer, prayer we do hope that one day these prayers will materialize I'd like you to just talk to Nigerians as we wrap up, talk to Nigerians if you were to talk to an ailing Nigerian a suffering Nigerian what would you say is there hope, is there no hope what kind of things do you feel they should do what kind of mindset are you giving to Nigerians in the final word please my message to Nigerians is that let's keep hope alive there is hope for the fact that we woke up today I'm on TV here, you are watching me that's a big thing because if we didn't wake up all hope would have been lost so let's keep hope alive but let us accompany those who have elected through the governance process let us not give up and say let us wait for 2027 no, 2027 is still four years away let us close mark our elected leaders because in those places where our young people are Japan too, that's what the citizens do if you go to London today, I can assure you that there are no less than 20 to 30 different groups protesting at the Parliament Square MPs are getting letters written to them by their citizens in fact it is the movement of the citizenry that makes the leaders not to misbehave because they know that if they misbehave the citizens are watching them and the citizens will come after them so let us not see those side and be praying and be expecting that good things will happen to us we must be participants in the governance process we must know our rights and we must call for those rights and we must ask for those rights because the state legislator is not working for us is not doing what we need record them start the record process by beginning a record process alone you will have a message to that legislator who will behave well and all those who are appointed to work with him that's the way we can build in Nigeria that will work for all of us all right, thank you so much Nika Gule for coming on the program and giving us your thoughts nice day to all okay that was Nika Gule a public affairs analyst talking to us about the fact that the interest rate has gone high and that means the resultant effect is in rents is in goods and services and so many other things so cost of living has become very high now so stop giving chieftaincy titles to people who obviously steal our money give it to people who are people of integrity let integrity reign supreme rather than kleptomania well we leave you with these words of red butler he says never pass up new experiences they enrich the mind we do hope that the experiences you are having now no matter how difficult they are you will take them and make sure they enrich your mind give you more wisdom to thrive it's been a wonderful time having you on behalf of the entire team of the breakfast this morning I would like to say thank you for being there my name is Nyam Gule Agadji let's do it again tomorrow