 Welcome back to all the breakfasts and pluss here in Africa. We're set to move into a first major conversation this morning. The Nigerian Employers Consultative Association has raised the alarm that the nation's economy is on the brink of collapse. They've warned that spiraling inflation, rising energy costs, the scarcity of forks as well, foreign exchange, the dwindling value of the nair amongst others are bleeding the nation's economy. The director general of the organization NECA, Mr. Wale Oyerinde, lamented the economy was under the weight of almost a cometous aviation sector, a stuttering education system, rising debt depleting foreign reserve and rising fuel subsidy expenses amongst others. The continuous depreciation of the nair to the dollar has generated lots of talking points from financial analysts, economists and individuals from all walks of life. The rapid decline has led to forecasts that the nair could fall to as low as 1,000 to the dollar if urgent measures are not taken. Although the central bank of Nigeria, which is Nigeria's apex bank that is working to halt the bail for consequences such as freefall may engender, the measures have not been as effective as intended. More measures applied by the central bank of Nigeria include stopping the sale of FX to forex bureau operators in 2021, selling only to commercial banks in a bid to stop the fall of the nair. However, earlier this year the CBN also announced it will stop the sale of forks to the commercial banks in the country at the end of 2022. Now is there any hope of this situation improving any time soon? I would like to say we have joining us this morning a certified Metavis expert is reaching us from Wari, the Delta Seat city and he is Dominic Rume Uriri Dominic, good morning to you. Thank you very much for your time. Good morning. I'm glad to be here. Do you agree with this analysis and the fears expressed by the director general of the Nigerian Employers Consultative Association who is saying the nation's economy is on the brink of collapse? Sure. You know, one of my favorite quotes as a financial analyst is that currency is actually life blood of a country. And when I say that it means that currency directly affects the way or industries like the manufacturing industry are able to bring in goods and the price of effect is going up. You can see that the manufacturers will not be able to get goods on time into the country that will be at a very subsidized rate. They might not downsize all their employees and that will also bring in a good hash to employees. The particular increase in the effects price is ensuring that manufacturers cannot get goods and is also ensuring that they will downsize so that they can accommodate and save some cost to be able to continue production because you see the thing it goes on to policy and a supply factor. And when I say a policy and a supply factor, the CBN has actually launched to be able to refocus the foreign supply into the hands of actually needed. And that's the reason why we're bringing a stream of these particular policies. And you can see that there is abuse from people in the society in terms of arbitrage in some of the dollar and then we can have the narrow rate set, an official rate of 4.17 in the bank. And then for you to be able to get access to that particular type of dollar, you need some special permission that you need to take into the bank for them to give you access to that particular rate. But then you also see where the parallel markets, it might be excess dollar at a rate that is at premium to what the Treasury is selling. Now, if you're in an emergency, a particular request that you are giving to the bank might not fly on time. And what if you need that particular dollar on time to do something? So we have what is called a widening in the gap in terms of the rate that the CBN is now selling and the parallel market is selling because there is not enough supply of a particular dollar in the economy as we can see things like the petroleum sector have to take so much money from the economy. And this particular outflow of effects that are in the country is increasing this particular supply and scarcity right now. And that's the reason why a lot of things like right is domestic and national trade prices going up difficulties to pay tuition fees at the moment, and which means that if this cannot be done, we cannot see capacity increasing. You can see assets on strike. So a lot of people are going out of the country to be able to further their education and because of the class capacity cannot do that, it's actually affected so much. You've seen the effects of, let me say, we have a case study in question of how the US dollar can really run out in a country and it can lead to very difficult economic fortunes and even civil unrest that can topple a government. Let's look at what happened in Sri Lanka where a country so heavily dependent on imports ran out of foreign exchange bill that thought the goods needed to keep the country going and led to civil unrest. And do you foresee, I'm not talking about civil unrest now, but do you foresee a Sri Lanka situation in Nigeria in terms of the proportions of economic meltdown? The truth is Nigeria has enough capacity to survive it. We must understand that it's not as if Nigeria has economic activity internally, but Nigeria does not have enough capacity to deliver its equipment and that is why we're begging for a diversification of the economy. I mean, prior to now in the SIFT, we had cash commodities that we're supplementing for bringing equipment into the country, which means that oil is not bringing enough money. And price of crude oil is going down or falling because of the things that we could pour on all of those things. We can have other shock asobas like cash commodities backing up the stability of the dollar. But in today's first century, we can see other things back up the dollar like intellectual property or skillset that are able to generate revenue or effects revenue into the country. Like we can see this in actually posing a gaze, cryptocurrencies and blocking as a technology. And you can see that this particular technology brings in a lot of them of what has been actually drawn out for the money that the fuel is being lost out of the effects transaction sector. So things like skillset can ensure that you can see something in $10,000, $30,000, $100,000, $570 million into the country, projects that you are completing outside. Then they can be reset to people when some of it that are happening in this particular country. So we must diversify the economy only, cash commodities, agriculture, we must also ensure that we start building innovation hubs just like what Graham is doing and what we are going to be able to ensure that we develop this set of African entrepreneurs in blockchain technology to see that there are now foreign reserves that can actually augment for this particular type of scarcity. And we can see that the government can also regulate the BDC in the sense that we will have about 5,000 BDCs with things like technology available where you can have all of these BDCs because the reason is that these BDCs are selling this particular asset at premium which cannot be monitored by the CBM because they don't have all of the equipment to be able to do that. But a strict regulatory policy to be able to see that all of these regulators are in one place and they may be even revoking some licenses of these regulators that might be selling crazily above the new rates and also ensuring that these particular Apex banks that they want to use to give access in terms of the supply of Apex to the country, the Apex bank will be able to actually meet up the demand for this particular supply of dollars that they want to give. If we do that, then I think the case, I know that the case of Syracan can not be called us because if we want to look at it in terms of the fact that we need to augment depths, maybe depths, maybe we have depth, I want to be able to pay back some depth, we can leverage on things like, we can do leverage instruments, let's say like NNBC, how can we declare their shares and make it public and people can be able to buy out and we can use it when we need to reinvest into the economy which brings back the supply into the economy. So there are a lot of things we can, that can abrogate because Sri Lanka. The central bank of Nigeria which manages the macro economy with its policies, its monetary policies for instance has been making some moves. You have for instance the central bank of Nigeria saying to BDCs we're not giving you US dollars anymore. Do you think that affected this situation for FX availability, positively or negatively? Yes, it actually affected me and in the positive way, you see. Dominic, can you hear me please? You seem to have a network challenge with our guest, Dominic, are you there? Yes, I can hear you very well. So we lost you at a point, maybe you could just start from the top. Okay, I said yes, it actually does affect the fact that you cannot tell a statement like that from somebody that is running the business at that particular level. You know, when you say things like that, people will be paid to maybe give that dollar out and then they get caught and get arrested. So there will be high tendency that there will be in most cases because people will hold back their dollars. And then when you don't know what the stability of the economy creates, you know that as of today we can have dollar at six before the end of the day, we can have dollar at six 30 or 40. The average opportunity or average type of opportunity would ensure that people would hold back their dollars. So yes, those have very massive impact. All right, the security situations, you know, some have pointed out as well. You know, do you think that the security situation in the country in a way has affected this whole dollar shortage issue or you think that probably doesn't have anything to do with that? Yes, it has. You know, when your country's security is very stable, you would attract a lot of foreign direct investment into the country. And as of last day, you have made a billion foreign direct investment for the past six years. And you can see that this because of the epileptic situation in this particular country, investors want to be certain of the investment piece in the necessary driver of growth and a necessary driver of foreign. It attracts foreign direct investment into the country. We cannot understand because of having a very stable, peaceful environment for us to increase this foreign direct investment. So people are actually also acting as an exit of money, offering direct investment out of this country. So we need peace. We need peace. We need terrorism to stop. What about the heavy dependence of the country for the total dependence of Nigeria on the imported fuel, which is a major driver of different economic indices, you know, including transportation. It has an effect on the cost of food. It has an effect on the cost of goods and services. You know, some have said the fuel importation situation is a major factor with the price of oil going up in the global markets. You have a country that produces crude oil not being able to benefit from the increased price of crude oil on the international market. Because what we make from the sale of crude oil, we have to now use it to buy petrol back into the country. Or if you look at the oil for crude for petrol regime, that means that we are giving out crude to get back petrol in return. So I want to talk about the fuel importation situation and why it has continued like this despite the fact that we have had a new administration for the past seven years. All right. Thank you very much. So Nigeria actually don't understand this. Understand that if the oil is at say about 30, and then you have it with the budget of country was pegged at about $30 for a barrel of oil. And during the year it increased to about 100. We have 70 plus to be able to pick in the market, which means that the country is actually meant to a lot of oil reserve from that particular $70. How many barrels that they are exporting? But when the situation, Nigeria has a exporting crude oil. It's not to be ending the lab. We do not end the lab. But we directly export the oil and then we import finished petroleum product. That's a little more expensive than what we're putting. And we still have to subsidize. It means that because it's more expensive than what we're importing. We still need to give them some extra cash for us to complete that particular supply chain. And it comes to a figure of six billion a year, six billion per year. In the last five years, the data that drew about six billion as we used to import oil into this particular country. We have 36 billion dollars going out of the economy to import products that we can refine. I mean, we have four refineries here in Nigeria. We're already here. We have a refinery that is down in Nigeria. And we're taking these 36 billion dollars out. What is replacing the 36 billion dollars? Now, understand these two that if the government decides now that they will not subsidize this particular money that they are using to augment for the extra that I made mention of. It doesn't mean the price of oil at the price of four or nothing. That's your pump price. We definitely go up. If you go from the 170 or 160 like this at the moment, it might go up to about 800 or 500. Because who would pay that particular six billion dollars? Citizens who want to pay that particular six billion dollars. The massive cost of the country because of petroleum is actually also affecting the capacity of this particular product. We see a situation where dangling might come to be able to help because of its refineries that is coming. So maybe we might be able to channel some of the products there and then maybe have a human structure team that can benefit the country. But truly, it is still a long journey ahead. One of the biggest challenges with the narrow is facing is the disparity between the official rates of the narrow to foreign currencies and the black market or parallel market rates. Why do we have the newspapers and news websites? Almost everyone in the country focusing more on the black market than the official rate, which is way healthier in terms of the rate of exchange to the dollar. It seems the focus is on the black market a lot. We quote the black market in the news. We quote the black market in the papers. We quote the black market. You go to the websites and this is what people look at. But if you want to do business internationally, the business is done with the official rate. So what's going on? I mean, the CVM moved from what it was before to the import and export regime, which is the rate it fixed some time ago. So why do we have this fixation with the black market rate? The central bank of Nigeria tried to help matters by introducing a Naira for cash for dollar program and that seems has not worked to a large extent. So what's it about the black market that keeps people focusing on that? It's actually still worse than what I said before, policy and supply. So there is also a function of time frame. You need this currency from the central bank. It's country currency from the apex bank. You need to submit some documents to them that backs the reason why you need currency. Because that is the currency that the CBN are taking to be able to ensure that what this particular supply and demand factor is going to be. But you want one million dollars. So you want 500,000 and you cannot get that day. Or maybe you can get 100,000 dollars from the bank. Where will you source for the remaining dollars? You have to go elsewhere to source for the remaining dollars. And because of the elite actions of the dollar in this country, and some people that have realized their economy, that the inflow of forex in the hands of some of those entities, and some of them they have forex stocks and kept, you would have to sell it. Now, when they see that you are in need of it, definitely humans greed. They will definitely tell you that you will sell it at a higher price. And they want to also make sure to bend the business to make profit. So the supply not being available for the apex bank. The major reason why people are looking at what? The parallel market. And the time frame at which gets it complicated with the apex bank. And the time frame you can also source for in the parallel market at a higher rate. That is actually one of the major reasons that what people are looking at. SIPI actually introduced an error for the lack of incentive. To an extent, it's worked. But then when investors don't want to fix in their money, if you bring in all your money now, Nigeria, what are the most stable economic conditions that you will use to invest them? So that has actually seen a little bit in actualizing the fulfillment of that particular program. And that is the minister. Finally, the central bank has announced it will stop the sale of US dollars to the commercial banks at the end of this year, 2022. Is that going to help the situation make it better or make it worse in your estimation? Well, I do not see... I don't think it will make it so much better because some people don't want to really declare all of their assets at work. Especially when they put it through some means that are not okay. So they keep some of it somewhere, right? And then you see a situation where these people are not allowed to deposit their money bank. It's going to be a big crisis. Sometimes, this was part of the deposit of 100,000 dollars bank. The deposit money in the bank was on the process payment in the afternoon. On the process payment before the end of the day. But if they stop depositing those money, how will the banks will be not getting that money? They want the banks which is not still bad. Ideally, the function of the bank is to give financial inclusion to the people. The citizens want to be able to produce cultural goods and all that. that. Okay, banks, give them, when they produce, let them be able to store these things, right, to be pouring, and be able to do effects from, and then deposit that particular effect. So, these people, they're really trying a lot of things, how they can trade. You see, it isn't only patented to MFLS. So, MFLS is trying all they can, but there's people pick up policy, actually regulate, and make PDC guys to be accountable. That's the only way solve this particular problem, and then ensure that they supply to them. All right, Dominique Rumeo-Ririé, thank you very much for your time, and of course, for your analysis on the program this morning. Thank you very much. All right, have a nice day. Dominique Rumeo-Ririé is a certified Mervis expert John Deslye from Delta State. We'll be back with more. We talked about the security situation in the country. Governor in Nigeria is asking for the permission to be allowed to arm his people. He believes the president will grant that permission.