 You're welcome back. It's still the breakfast on plus TV Africa and Like I said, we're going to still talk about some money matters. This time is the value-added tax 7.5% on diesel that we've it's subsidy seems to be flying out from everywhere, you know Now fend for yourself. Our country will be great again Not really taking the words over Donald Trump, but make Nigeria great again as it were We are being joined at this time by mr. Shagun shop with on a principal partner would reach and Scott consulting Good morning, and welcome to the program sir Okay We're still here in the studio with mr. Bola hon or large a day who graciously has stayed back to still Look into this issue as well. Tell us how much you know about the value-added task tax rather That is going to be on diesel and how you think it's going to impact the economy Mr. Shop, we're done. Okay. Yeah, thanks. Well This is actually not really new It's a policy that has been I'm approved since 2021 they're about However for reasons that we may just have to guess Implementation did not commence until just you know this week as confirmed By the Nigerian custom service So what's happened is that there's a there's a there's a bad list and there's a bad exception list and in the Tariff code called the HS code of the Nigerian custom service. There are certain items that Have been exempted from different types of tariffs and taxes and a geo was Petroleum products generally was on you know This list of exemptions up until a particular time and then there was a tariff order that was issued in 2021 that removed a geo from that list Unfortunately, or fortunately, I think fortunately for Nigerians that was not implemented But this week it's you know, the customs has announced that implementation is going to commence or has commenced on The non exemption of a geo from that that exemption list What this means basically is that The 650 to 700 that you currently pay at the pump or diesel will go up by about 50 nair they're about to just do the calculation just 7.5 percent of that current price, you know So in implication wise what this simply means is that you know, this is an additional pressure on the disposable income of the average Nigerian is an additional pressure on The revenues of profitability of corporates and Small businesses that rely on diesel will recognize that the majority of Should I say the a larger portion of diesel consumption in Nigeria goes for business uses? Very few people have diesel powered cars. There are diesel power cars But majority of diesel vehicles are large High-duty vehicles that are usually used for transportation and other heavy-duty activities So this will put pressure on profitability of businesses and you know, of course, that will be transferred You know to consumers one way or the other inadvertently so it's an additional pressure point on Nigerians and on Nigerians pockets as it were I would have thought that It would have been better to harmonize a lot of this policy pronouncements See there is a lot going on at the same time right now From the monetary side from the foreign exchange side The CBN is trying to manage inflation and is battling the issue of monetary policy rates and trying to decide whether or not to Increase or to reduce or to hold the NPR exchange rate has just been liberalized And then of course as we all know the famous subsidiary move out It's a lot going on on both the fiscal and the and the and the monetary side of government policy If you look at the presidential advisory council reports of this current president There there there are very interesting plans regarding harmonization of monetary and fiscal policies of the government I wonder why those plans are not being implemented in line with what is contained in that document I wonder why this policy pronouncements are coming almost disparately and independently It would have been good especially from an investor confidence point of view to see some Coherence and coordination in the manner in which this announcement have been made So hopefully we will get to see a bit more of that maybe when the cabinet appointments have been announced You know and all of that but for now There's just a bit of uncertainty and that would explain To some degree why the volatility that you guys were talking about earlier is being observed in the in the forex markets There's there's simply too much going on and and the markets are if you like just to use the word I bit confused So things will settle down hopefully and we'll see what direction these policies will use us But for now, I would have suggested that we take it easy a bit and ensure that there's a bit more coordination in the direction of these policies Okay, just taking from the final word that he just said now seems as if we're biting more than we can chew at that moment because Nobody will care if if the entire world is owing us so long as you're still going hungry every night Nobody cares how much money we make and it seems as if everything this administration is doing is to drive The revenue process to make sure we have more money and to what end if people are still suffering So do you think we're biting more than we can chew? It's a it's a whole lot to bite at a time But my take will be if we're gonna go that route biting so much The plan to handle it must also be robust enough Most of these plans have not exactly mentioned. Well, yes Mr. Chopiton spoke about the advisory council report as a report We shared some of these plans actually that report. I think about 50 page report and you can see part of what the government intends to do however As it is today, we need more coordination we need champions So if I'm talking of the monetary policy, for example, I like to know who is the champion of this policy? Who is the face of this policy who communicates with me? About this policies Who takes the feedback from me about this policy as it is today. There is none really because we we We don't have a civilian government place as it were There's an acting person there, but I'm not even sure if he has made a single pronouncement You know regarding this matter. There's no finance minister. So on the monetary on the fiscal side I don't know who my champions are. So I'm relying on on on the report by the advisory council for example Which is not it's a good report to invite something I every Niger needs to go and take a look at because most of these policies most of these Several things that we say we are biting at the same time actually encapsulated In that particular report, but we like to see the champions who can communicate with confidence And show the people you know where you're telling people we are going. This is where we are going They also like to see a champion who is in charge of that And if it is somebody they feel they can trust it helps them It even helps people who are watching us from the outside to know that oh these guys. Yes They know exactly what they are doing and this is the plan. This is how they intend to achieve it So maybe maybe in a time not so long We will have that cabinet in place and that you will be around pegs in round holes So that we can begin to see more of that coordination. Sometimes even if there's some coordination at the back People still want to see it at the front end And we are not seeing much of that for now Mr. Shokun had spoken about why How come we have not implemented the VAT all this while since 2021 one of the reasons This is me just looking at that particular market could be that at in 2021 there were price issues So there was a time we saw a diesel went all the way from 200 to 800 to 850 When the war in Ukraine started over a year ago So that same price at I started to crash I was looking at the ex-depot price for diesel and one of the Depots was advertised in 550 and I asked myself This is definitely a good thing something has happened to the price of diesel It could also be that's window that something has happened to the price of diesel that the government is now looking at So look if that thing has moved from 850 and it's now at 600 Why don't I use the opportunity to put in this 7.5? But it would be better if it is communicated in a coordinated manner We're doing this. This is where we're going Is the time frame not too short to draw that I understand this issue of Time frame, but I prefer to approach it from more of a detailed plan than the time frame issue It's not it's not everybody that will agree with you that they would rather you do this you do one now You just say it's conjecture you just said it's Suppose that maybe it's because the price of diesel crashed and then they want to take the opportunity but between the time they the price of Diesel crashed and this time that they want to take the opportunity Is it not too short for them to say they have studied the market so much that if they take this opportunity It will not result in the people even suffering more. No It's an opportunity that must be taken at that right time It's one of the problem we had with subsidy removal why it became a lab mattress on us There was a time in the life cycle of oil in the international market where The price of a barrel of oil was zero People were even willing to pay for you come and take this thing off this vessel So that I don't have to continue to pay storage fees. We did not remove subsidy in those years We waited until oil price added to pick up and achieve some high prices And that is the time we are trying to remove subsidy. It is part of the pains. We are feeling as it were so it was also sees the moment but That statement that I make that was me Trying to read a minute to why they are putting the 7.5 now. It will have been better If there is a champion out there whose responsibility is to communicate Why what is what at a particular time? Not me. I'm not so I don't want to go back. Okay. Well, Mr. Chopiton. Well, the government They have an advisory council. Okay, we agree, but there will be ministers There will be people put in place to run this process and I'm not sure a Right-thinking minister will just come take everything hook like line and sinker They will tinker some with some of these things that they have they have put in place now so do you see do you see a change to the policies that Now being implemented so to speak or now being pronounced right rather when the cabinet is officially formed I Wouldn't expect too much change and I think this is absolutely critical look one of the problems that we've suffered Over the years, especially, you know the last eight years The past administration was a lack of coherence and a lack of proper communication of The actions and the plans of the government with regards to the different sectors of the Nigerian society Whether you talk about economic managing the economy whether you talk about the scary situation even the anti-corruption fight supposed it There simply was no adequate Communication and there was no clarity as to what the exact plan was where were we going as a country? So it's a it's a it's a good thing that we It's a departure from past practice where you just a government comes on board They came on the on the back of promises during campaigns and Then when they resume office when they win the elections at the resume of this You can't see the correlation between their manifestos and the actions that they're taking For once and this has to be said no matter who you support from a political point of view For once we're seeing a government that campaigned on the base of certain policy pronouncements and policy promises Almost every single one of those items are contained in the in in a policy Documents that they say will guide and direct You know the actions of the government. I think this is very good. It needs to be commended now the If when the ministers come on board it would be a disservice to Nigeria or those ministers to To to digress From that plan in any manner shape or form that plan must be a guiding light It must be the the the the source of the policies and pronouncements that this government makes going forward So no, I do not expect to see any changes. Of course, there will be little tweaks here and there You know from the different You know champions like misalogy they said you so you have a minister of say the central bank now comes on board or the minister of finance You know, so there might be the minister might look at some of the components of that plan and say oh Well, this is good. But why don't we approach it in this way? There will definitely be little tweaks there But if there is a significant departure, then it's a breach of trust So I think that it's a good thing that we have a plan It's very important that we see that plan executed You know as close to the letter as is possible. What this does is that everybody knows where we're going Everybody knows why subsidia has been removed. Everybody knows why You know that has been is being increased all of the pain that we're bearing This is the reason for it and this is the destination You know, so so by the same token, I think I need to charge This government in particular and especially the president to understand that He is a leader and he's leading people. He is not a ruler It is critical to communicate a vision of the destination to those people as you lead them along the way So that they will follow you otherwise you might discover that you think you're a leader And you are going in a direction you look behind you nobody's following you and you discover that you're just taking a stroll in the park You will fail as a leader. So communication like mr. Logie They said earlier is absolutely critical But I think also that that communication needs to come from the president I would have preferred to have seen in the inauguration speech of the president A vision statement a clear picture of where the country will be in four years time Which regards to specific indicators, you know within the economy and within the society That didn't quite happen, you know in a manner that I think would have been more more powerful and more effective But um, it's a good thing that we've seen a problem And one can only hope that the government stays true to that plan as much as possible You know as it goes along. Yeah, we have we have experience of you follow the master plan or you are rooted out You're kicked out. We know where that happens or that happened In this our Nigeria, we hope that it will be replicated at the federal level but you know Both of you have talked about communicating with the people and If you ask an average person The question will be that Why are they even collecting this so much taxes? How is it going to affect me as a person? We need that to be communicated because if I know that diesel will go up and my life will become unbearable It doesn't matter where the money goes to whether we Like I said earlier on whether the entire world is going Nigeria rather than we having debts It doesn't matter if I still go hungry. So Let us Let me hear from both of you as we wrap up, you know The marked advantages of the of collecting or adding these taxes to everything that we are going to Be using in our day-to-day lives, you know, where's the money going to and is is it going to affect the common man? Let me remain with you. Mr. Shopitam before I come back to Mr. Alojo. Okay. So so that's an absolutely critical question that you raise And I think that this is the part of the equation that the government Is getting wrong And that previous governments have gotten wrong Look, if you're asking people to make this Tremendous sacrifices We need to understand the impact of this policy pronouncement on the lives of people lives are changing in in fundamental ways People are making sacrifices in fundamental ways People are changing lifestyle choices as a result of not having alternatives because their income is not increasing But costs around them all around them are going up You can't ask people to do that and you have they have nothing to show For those sacrifices on the one hand And then they see you as a leader making them Take on those sacrifices not also making commensurate sacrifices So this speaks to two things one the cost of governance needing to be radically destructed to be brought down and two that The promises that have been made, you know, which regards to the deployment of these resources that are being raised Subsidy removal is a way of raising additional Freeing up funds for the government And the government has said this will go into improvement of transportation It's going to the improvement of the power sector and health and education. These are the things that the president said Those things must be seen now The experience we've had as a people in this country, even if you limit it to just Fourth Republic starting from 1999 is that subsidies have been removed Um, if we trace the history not less than 10 times and each one of those times There were promises about what would happen to infrastructure and to social services those promises never Came to fruition So this is the challenge if you are asking people to make these payments you are putting 75 percent 7.5 additional tax on diesel for example Where is the commensurate investment in social infrastructure social services that will improve the lives? The quality of lives of people it's missing. So this is something that the government needs to address as a critical matter of urgency We need to see action and we need to see, you know, it takes years to build a rail project But it takes only a few months to make a pronouncement about it It takes only a few months to to let people know that you have engaged a contractor or you have commenced the public procurement process You know to deploy rail. So those actions need to come as quickly as possible So that the confidence of the people in these policies can be maintained and you will not get a revolt on your hands Okay, uh, mr. Laudejo, I I wanted to ask you to tell us What best will be the methods of communicating to the people? But let me digress entirely because of what mr. Chopperton said and I will take very brief comments from you because our time is up really Um before now we were talking and in fact, we've seen it that they Revenue mobilization and fiscal commission has approved or at least has has written a document To say that the political office holders and judges and all that their salaries will have to go up by 114 percent I just want to pick your minds and see how you think about that in a situation where Nigerians Suffering Nigerians are trying to adjust like mr. Chopperton just said and all that and then the salaries of Political office holders and judges going up by 114 percent That the nlc is asking for tuc is asking for nobody has talked about it No, no, no, no, it's not right to say nobody has talked about it That is currently part of what the tripartite committee Of government and nlc are working. I see but at the same time the optics about the 114 percent increase of you know segment of the society's salary the optics is very bad The act or the action in itself You know looking over 15 years and taking a review one for the first time in 15 years the action in itself is not bad But the timing makes the optics very horrible Even if this work has been done, of course the work did not start a few weeks ago It must have been a work. They've been at for maybe more than one year, you know You you hold it close to your chest. You probably address that labor matter first And when you have something in that space then you can bring your own to the table. So I say, okay, we are doing this for labor This is also what we think of doing for the political office. So that's the one for federal civil service. I think something has been done so I still see communication as a problem out there So if if our president, do you know what are we going to do? I would say I don't want salary Take my salary for the period Put it in that or that project because the real problem about Cost of governance is actually not inside salary. It's not inside there A lot of them who afford to say Take that salary They are in some other things that we must pay attention to But the optics about one and fourteen percent at this time that optics is horrible Okay, mr. Schropp, let's on please Your own take as well. Everybody has been talking about cost of governance and you mentioned it And now this one is happening. We've heard the take of mr. Olodejo. So let me hear you too Well, look, I agree with him 100 percent. I think it's it's about the optics um, I think that if You know, the president wants the support of Nigerians and he needs badly to get the support of Nigerians He needs the validation and the legitimacy issue addressed He needs to lead by example. So taking a salary cost Is a better way to go than taking a salary increment when you've just increased everything for everybody else Beyond the salary is just like mr. Olodejo I think this is the key thing for me. This would be a takeaway It's that the cost of governance itself in terms of the allowances in terms of the boiling the number of aids that get appointed in terms of things like Your motorcade, you know, the the the entourage that goes with the you know, governors and all that all of these things need to be holistically addressed the orosia report orosia report is still sitting there, you know gathering those harmonization of the mds to make the government smaller lean mean Efficient government is what we need now a very productive government. I'm not talking about civil service You know sacking or reduction But a harmonization of government processes to make them more efficient So that for the same naira, we're getting a whole lot more productivity This is key and it's something that the government needs to look at urgent Okay, uh, well, I'd like to thank you gentlemen for being on the program. First of all, uh, mr. Shopper tone principal partner would reach and scott consulting. Thank you for being a part of this program today Thank you And to you mr. Bola hon ol luge day. Thank you so much. Thanks for having me Okay, uh, that's where we're happy though on today's show But remember our memory versus it where the code for the day from vines Lombardy is winners never quit and quitters never win I'm sure a lot of you have heard that but this is the man who said it we do hope that you will not quit And above all don't take your life no matter how difficult things might be Let's do it again tomorrow. My name is Nyam Gul Aghaji