 Welcome back. In addition to the legacy incidents of imported inflation occasioned by the weakness of the Naira, recent fuel subsidy removal and the liberalization of the foreign exchange rate in Nigeria, with their consequential effect on consumer goods and business operating costs, have continued to cause a rise in Nigeria's inflation rate. International Finance and Economic Analyst Mukta Mohamed joins me now as we keep an eye on the nation's economy. Thanks for joining me Mukta. Thank you for having me. Alright now the latest CPI for July report by the NBS our headline inflation rose from 24.8 in July to 25.80 in August. That is a 172 percent point, a business point higher. The AIDS consecutive monthly rise in the highest inflation rate experience in 18 years. What exactly do we have in our hands Mukta? Is it that we will not be able to afford foods every day? What is going on really? 25% is so so so high. Yeah David, I'm just sorry. Just when you look at all the economy of the world and when you look at African economy you say look we're not doing too badly but like people always say that is the official inflation and figure that the unofficial one is higher than this official inflation figure and you and I know the what the challenges are because we import a lot of our products and because of the volatility of the exchange rate which have gone up and so you are having those inflational pressures that you are having and so then you mustn't forget the mobile first subsidy because our economy is a fourth driven economy because a major means of transportation are driven by PMS so definitely I think those are what is foreign the especially the food inflational pressures and also other personal figure especially for household item. So that's the main reason until we address the volatility in the exchange rate and also see stability in our PMS maybe we get to that point where we have a stable and price but as long as we keep on having because of the international benchmark of include oil and definitely we continue to have this impression a thing or like people say like I would just say they feel that inflation is even higher than what we have. All right well according to the NBS the food inflation rate like we have talked about in August 2023 was twenty nine point three four percent on a year-on-year basis. I know this was caused by the increases in prices of you know staples really that's why I've even bought that bread and cereals potatoes yam coffee fish cocoa these are the things we take on a daily basis so if we keep on rising like this what are we going to eat Mokhtar? Just you have to think of what you have to maybe you have to do scale of preference of what you have to eat but I think I expect to slow down towards the second quarter of next year. Like I said if we have this stability in the exchange rate if we have stability in the price of petroleum product and we expect that to happen when we begin to do local refinery refining of oil we expect that to start with the refinery sometime between November and December and even want to take the government by the by the awards but like for my president of Basan Joe sitting in a recent interview that would be a miracle then the protocol refiner issue should be working in December so when we have those food factors local refining then we are not so much open to the international price because what will happen the international price the increment will not be as high as what we will obtain now because we are importing it and paying some charges through the high sea so I think that's where I think we begin to get a stability especially within our own local consumption like you talk about cocoa like you talk about a yam two bars and everything all those things so but when you talk about those that we import into the country especially cereal food especially wheat don't forget that the wheat is you also have to do with the challenge that we are having between Ukraine and Russia okay so when you put those ones they are hunting we address the volatility the exchange rate will continue to get the hike in those places all right before we move on to talk about the debt stock let me just ask one more questions on you know inflation rate and all that because over time when the inflation rates keep on higher the central bank in its MPC and everything will increase MPR and stubbornly in our own inflation will never ever agree okay the seabed is about having a new hemsman at the top that's a mcadoso a subject of confirmation by the Nigerian Senate now what would he or what should he be doing in the immediate to when he takes control very very soon um Justin yeah economics very good has to do with demands and supply you know um do the right thing then the economics it's it's right full place i like putting what my very good friend paul alabi will say paul alabi will say when you commit spiritual sins call me easily forgive you when you pray to god yeah but when you commit the economical sin you will have to pay the price for it and you must pay it so once we are not doing wrong i'm not getting it right we can't get it we want to decide to get it wrong i mean right when we have done wrong we have to pay the price for it now uh my own challenge with the appointment of uh the new cbm gov i mean the incoming cbm gov now will be the most no the secrecy of the cbm is still the the independence of the cbm i hope we don't get into a situation where the executive have a full control of what happened to the cbm because the president have said that he wants to stay with exchange rates he wants to make sure that the economy is moving want to measure the economy group by 6.7 percent we've already talked about the synergy between the monetary policy and the physical policy so what we need to see is that if the physical side are doing what they should do the monetary side will also be able to complement the physical side then we will see those results we don't want a situation whereby the executive will not hijack the monetary policy to begin to tell them what to do to synergize with what the executive are doing even if the variables are wrong so we need to know that there's the best independence now talking about why we're not seeing those in pleasure because we have not looked at our own peculiar situation what we are looking at we are looking at copy and paste now our situation is different from their own situation because their own situation has to do with just hike in price due to factors that they could control through maybe an injection of a little bit additive into the system or giving a tax bracket to that sector then the impact will be seen what our own has to do with production and production and inflation and pressure microeconomic inflation and pressure consumer inflation and pressure and also the pressure that have to come with exchange rate volatility so we can do things the way they do so what we've been doing is oh the only way to address inflation and pressure is to increase rate but in our case when you increase rate you are even causing challenges to the bank because the non-performing loans gets up because our economy is a consumer driven economy we need to consume and once we don't have money to consume the economy begins to shrink and we begin to have the challenge that will come with unemployment so we need to look at the precarity of our economy before taking economic decisions so enough not to agree with what he's I mean he's a good candidate I mean I expect a lot from him but then he must know that he can't overnight just come in to teach it towards the executive whereby we begin to have a stand like what we have in the in the national assembly and the executive all right okay so let's just move away from that and talk about our debt stock for a few minutes well Nigeria's total public debt increased to 87.38 trillion Nair for the second quarter of this year from 49.85 trillion Nair in the first quarter now this reflected 75% growth compared to the first quarter of 2023 and 103.92% growth compared to the second quarter of last year when debt stocks stood at 49.85 trillion Nair and 42.85 trillion Nair respectively I want you to break it down for us what are we currently dealing with as it is because it seems as though we really don't have an inkling on how to really manage our debts in the country we don't just think we don't because the previous administration was the world's administration in terms of economic policies relating the new how to do best was to borrow from everything imaginable they just want to borrow borrow to pay salary borrow to pay the financial borrow to do this borrow to do that borrow to what we've seen that the now they never when president Buhari was in power when he traveled after the show of this country what he's always thinking about is how so can you give can I have some money can you borrow me some money but what you see president doing now is when he travels abroad he's saying can you come and invest in my economy can you come and invest so that you can pay me tax then you can employ my so there's a different strategy so the depth profile is not surprising to anybody when you look at what the previous administration have done they were just out there to borrow borrow borrow borrow now what are we into no let me tell you we are not too much into a challenge the only challenge that we are into is just what we are coping with now what we are dealing with now we are coping with it and we are dealing with it it's that we are not able to to to have enough of our resources to bring into capital development so what we have now is is is more or less what can only be used to for for for for payment of salaries and then after that there seems to be nothing and it's not just with the federal government alone even the state government have that same challenge so we are dealing with this yours most of about 75 to 85 percent of our revenue is used to service debt so it's a big big challenge but the whole idea is that why do they give us this debt because they know we are coping with pain so what I express percent you know what to be doing now is to look at them to their faces and say look it's not sustainable like this can we have a dollar whereby we reschedule our debt we are going but can we begin to reduce our debt because we can have money for capital expenditure all right that is the only way we have to get out of where we are today all right Mokta on a final note we were supposed to talk about the contributory pension scheme but we are completely out of time maybe another time we'll talk about them how we've been able to grow that particular sector thank you so much for your time on the show for today my pleasure just thank you for all right my guest has been Mokta Muhammad he is an international economic analyst and that's as much as we can take up a business insight to a return again to your screen same time my name is Justin Akadoni many thanks for being a part of the show bye for now