 The central bank of Nigeria, Sebyan, has reported a significant increase in foreign exchange inflow into the economy in February this year. The increase is attributed to substantial remittance bailed by Nigerians overseas and purchases of now-acid by foreign portfolio investors. The APEX bank's acting director of corporate communications leases Hakama Sebyali, a neighbor's note in a statement made available to a newsman. Sebyali noted that the bank's data indicates that overseas remittance is rose to $1.3 billion in February, more than four times the U.S. $300 million received in January. She added that foreign investors purchased more than $1 billion of Nigerian assets last month with total portfolio flows of at least $2.3 billion. We call it Phosphor in 2024 compared to $3.9 billion seen in total for last year. According to Seby, higher APEX inflows continued in March 2024, driven by increased investor interest in short-term sovereign debt, following the recent adjustment to benchmark interest rates. Meanwhile, international business research from the Economist Intelligence Unit has said that the central bank of Nigeria does not have the liquidity to support the Naira as of now. It's database in its latest country report on Nigeria, which was published on Friday. We will stay on the Forex issue on this edition of the show. Welcome to Business Insight on Plus TV Africa, as we will also briefly address the issue of bad-of-pardon allegations making the rounds. Welcome on board. I am Justin. Akadonia. Welcome back away from that report, but let us talk about the Forex crisis in the country and how we can actually make it better, if I may say. Now, the central bank of Nigeria says government securities issuance had been significantly oversuscribed, but foreign investors accounting for over 75% of bids received are the auctions conducted on March the 1st and 6th, 2024, and that inflows are improving. Now, let me bring in my guests now. International Finance and Economic Analyst, Muhtar Mohamed, let me get his reactions to this development. Good morning to you, Muhtar. Thank you, Justin. Thank you for having me. Good morning. All right. Let me start this way. The seemingly oversubscription of government securities by about 75% by foreign investors, what significance does it really have, or is it really having on our Forex regime and the Naira? Is this what some sort of panacea that we're supposed to get or see, or I don't know, what are your thoughts really? I think it's good news for us. Our reserves have today reported that our reserves have gone up by 2.83%, which is good. We are beginning to gain inflows and about 2.8 billion dollars in terms of influence for me. That also is good. So now, why are investors coming, why are they oversubscribing the bond market? You remember that inflation is low in the developed economy of the world now, and so the return on investment is low, and so they are looking for other investment, other place to invest. And now we are giving a high interest rate, like it's a government security is giving up almost 22% in terms of interest rates. So definitely it looks like a good place for foreign investors to want to come in, but it's the foreign portfolio investors that are just coming in, what I call for the hot money. But now we need the hot money to stabilize our effects rate, and again, why they are coming now? They now also strongly believe that the Naira is under value, so if they are able to get it at the rates they are coming at the higher rates, they will be exiting at a lower rate, which also will also improve their own profit margin. I think that's why we are seeing that so hopefully we might be seeing a lot of these foreign investors coming into the country. I understand you, you're saying that really there is an indication of interest in our short-term security debt, or is there something else that we are not seeing, or is it just because of the under value of the Naira, or they are similarly interested in our interest security debt? No, I think when you look at investors are not looking at the long-term interest when they are coming to your country. They are looking at the short-term, what harm are they making the shortest possible time. And like I said, what they cannot get outside the short-term, remember cost of funding in their country also is very cheap. They are borrowing maybe less than 10 percent, and you are making about 22 percent here. And when you look at inflation in those places, inflation in those countries has got like a 4 percent, so those variables in foreign land, when you make a return of 10 to 15 percent in your investment, it's a very good investment. So basically that is why they are coming in, or like I said, they are the portfolio investors and they are here for the short-term, and it's now you able to balance up and make sure that for the investors that end up becoming foreign direct investors, so it's up to you, or how you finally handle them to turn the corner. My challenge in all of this is if they are bringing in the effects, you must also be able to create a window for them to exit, and so that's what the CBA is not there, because we don't have enough effects. Remember, some investors have not been able to to guard their funds to their bearers' countries, so Nagia is still not admitted into the frontier market, and I think if we are able to do what is right, we could see Nagia coming back to the frontier market, and that also will bring a boom of these foreign investors into our country. Okay, let me try and put it differently. Let me just play devil's advocate now, but the CBA and Governor Olaemi Cadoso had set out a detailed strategy to curb inflation, stabilize the exchange rate, and spur confidence in the banking system and the economy using last month's monetary policy committee meeting, and the conference call with those foreign portfolio investors that we have just mentioned. So, would you say that these strategies are working in your opinion? Is it too early to call? Too early to call, I'm just in too early to call, but it's working now, like I said, it's in the short term, but it's too early to call. You see, they are coming in now, they have not complained about exiting, like I said, if it becomes a challenge for them to exit the market, then you know what I would do again, but again, if a chance they want to repatriate their money back, I'm able to repatriate it back for them at 20. Remember the CBA and after the oil major that you cannot repatriate 100% of your phone out, you can repatriate something you have to wait for three months. That also is not a good point, but after I said that, he met with the foreign investors more assured that their phones can go in and out, and that is because the whole idea of hiking rigs was to attract these portfolio investors into our country with high returns so that we can easily stabilize the Naira. All right, the Naira is about, let's say, the second worst-performing currency in the world after the Lebanese pound. But right now, International Business Research firm, Economist Intelligence Unit is saying that the central bank of Nigeria does not have the liquidity enough to support the Naira as of now. Any of the similar good news that the CBA is making us believe, what do we make out of all of this, Mukta? Yeah, well, when it's said we are the worst-performing currency, then again, we'll cap it over and say we are the best-performing stock exchange in the world. So, it's not even there. All right. The other time that we were the worst-performing exchange, today we are the best-performing exchange. So, believe strongly that the Naira is really undervalued. I believe strongly that we'll get there as sooner than we think. Yes, you're talking about our foreign reserve and the CBA. It just tells you, I mean, sorry, Justin, it just tells you when you have a strategic government, they are able to strategize and get things done and don't get into the kind of crisis we've gotten ourselves into. Look at Egypt. Egypt did the same thing we are doing now. They used to do a managed system, but they've moved to a floating system. And what did they do? They knew that liquidity is the challenge. You can't leave your currency for market forces. So, what did the IMF World Bank, you are the one telling us that we need to we need to float our currency. We need to attract investors. We need to do this. Our currency is not right. We are going to do that. But in the interim, IMF World Bank will give us a loan facility of about eight billion dollars. And so, IMF agreed. So, immediately they float the currency on day one. The currency lost 50 percent to the dollar and the pounds. But two days later, because they have the liquidity to say, no, this is the right value of what our currency will be. The currency have just lost 30 percent because they have liquidity. And then they are not attracting investors. Stories are not coming in. And so, by virtue of this now, it's not creating it's not creating effects for them in the long run and stability to the boring form in the short term. So, that is strategic thinking. You don't just think, oh, this is gone. This is that. And you don't have a strategy. Well, you come over and tell us, oh, and you really change. We'll be giving them 20,000 dollars. Then the following day, you are suspending 1,430 bureau exchange. Today, you are approved to give 20,000 dollars every week at 1,300, if not done it. And the exchange rate that was stabilizing at 1,400, 1,500 at the point 1,300, is now moving back to 1,600. So, it just shows that we are not strategic in our thinking. So, we need to be strategic. And that's why I use the Egyptian example. Okay. Okay, I see others to just examine the EIU report about the foreign situation in the country. Specifically, it is suggesting that the CBN resorts to foreign borrowing to support the Naira and fulfill its effects obligations. I want to find out why you reason about this economically, because when we talk about borrowings, I just tried to be a bit careful knowing how we do with our borrowings in the country and obligations and repayment and all of that. But let me just understand what you make out of all of this borrowing in foreign currency to support the CBN's movement, of course, the effects of obligations. I said it before. I agree with that. I said, if you want to stabilize the efforts, we need to think about how we can borrow. Now, borrowing, like you said, it might be to borrow through Eurobound and all that. But unfortunately, a lot of people will not invest in your Eurobound when you don't have stability in your exchange rate. So, they will need to know that your exchange is rightly priced. As I can say, it's undervalued or good. But that could also be an example for the incentive for them to come in, because they know that they are coming in high and they may be in low. So, I think that's the right way to go, because we don't have this if you look at what we're talking about, we're talking about the auditory part of the CBN before now, which is $3 billion as a company in our foreign is that we move out all of obligation. And so, I totally agree that we should borrow, but I'm not the type of borrowing that we have done before, which is we just borrow for consumption. We just borrow without a target. I think this time we should borrow for the sake of reform. We've already done that again with the MZ Bank, Africa. Is it an African MZ Bank in Cairo? But up to this moment, the $3.3 billion has not had any impact in our currency that tells you that we need to do more in terms of bonds. So, I totally agree with us trying to borrow to stabilize our currency in the short term. But the challenge is that now, at the time we borrowed, we're saying that President Buwari, they have borrowed so much. But at the time they were borrowing, even foreign debt, they exchanged about $400, $360. And by the time they are going away, the government, as officially I just said, they left the fleet for market forces. They have gone to $1,000 and $1,500. So, our foreign debt has dramatically increased. So, the government will be in a dilemma. Do you want to continue to increase the debt burden on yourself? I don't think it's one thing the government want to do. So, it's a good thing to do, but the government will need to be strategic so that they don't have too much debt complication. All right, Mukta, let's leave the Forex issue on talk. A bit of political economics, if we may. Let's just leave Forex for a bit now. What is in the news right now is the issue of budget padding allegations here and there, about $3 trillion naira in the 2024 budget. Mukta, we've talked about budget over the years in the country. Right now, it is resurfacing. So, right now, should this allegation be anything to go by? That's on the one hand. And what are the implications if truly we're implementing a budget that is padding? What does it really mean economically? Economically, it's not good. I mean, your budget deficits will go up. Again, I mean a lot of funds are not in the creative, productive sector of the energy economy. And that's why we are suffering the kind of inflation we are suffering now because of about $30 trillion that was printed through the ways and the means. So, when you have a budget like that, which provision will not be made for consumption or corrupt tendency, it tends to have an inflationary pressure on the economy and then high interest rate, high inflationary pressure, low ability for the citizen to end, to be able to end more. And the opportunity power would have gone up drastically. So, I think the presidency has come out and said there's nothing like that. But again, coming from a senator, he gave a lot of detail. So, we still need to hear more from the president. But my only complaint in all of this is that it's targeting at a particular region, trying to make it feel that a particular region is being not run in the scheme of things. And I don't think that is good for the senator to be saying that. But if he's saying that a lot of budget targeting are based on projects, it should name those projects. He didn't say we are discussing with the president, we've had consultant to analyze. So, you should have waited for your consultant to have come with the result before you come to the press. So, for me, I think everything in this country is becoming political. Even the economy is becoming political. Even in funeral service, you saw what happened in the funeral service of the late C.C. of access holding, where it became a political talk between the senate president and the governor of river state. So, we tend to politicize everything that has to do with other. I don't think it's we're talking about economy. We're talking about the livelihood of Nigerians. We've seen hunger in the land and it is not looking at only APC members are feeling hunger, only PDP. It's affecting everybody. So, economically, one thing you must give it to develop economy, especially in the United States. They don't play politics with security. They don't play politics with economy because that has no face. It attacked everybody and it doesn't know the rich. It doesn't know the poor. It doesn't know the middle class. It just comes in and then it's attacked. So, I think the senator Nenghi should come out clear with precise information and the presidency also should come out clear in terms of defending themselves with also precise information for us to guide us. I thank you Mubta. Indeed, you mentioned about economic hardship and them hunger in the land. How have you been surviving, you know, the price of Gary and of course, and beans skyrocketed. Can you give us some survival mechanisms that you have to use it? I do it. I don't know why I'm calling you David today. Just it. I think survival mechanism is budgeting. We need to start living our life by budgeting. What you don't need, you don't need. You take away your want and deal with your need in tough times like this. We need to begin to think of budgeting. You don't just spend this on impulse. For me, that's the key. I'm smiling today because I tend to make sure that you make sure that there are some things that I need. There are things that I want. Your need is in terms of you need a house. You have to pay your house friend. You have to pay your children's school fees. But you don't have to work close. Those are needs. But even in terms of moving out, you want to go out because of energy is high. So, you need to say, okay, fine. Is it worth me working from home or going out? And if I want to go out, right drive, or is it cheaper for me to enter public transport, tango, we have BRT, we have the red line and the blue line, metro system coming into play. So, all those things are things that you need to consider. But it starts first of all by projecting. You and I have that experience. Remember, when I have to come to your studio, we have to work it out. So, this is a part of the task that we have to do. You project until you need to start and the only strategy to survive at a time like this is to make your budgeting very serious. Know what goes out. Know what comes in. Make that your budget. Look at, are there leakages that I need to control? Do I have to get data to make a call to Justin than using my direct phone night to call? So, those are literally two things, but when you calculate it, Justin, before you go, let me give you an example. Seeing these issues or for a price I have come in, I have not bought gas in any other station than NNPC. Because by buying NNPC, I'm saving myself almost like 13 lira. So, and it doesn't look much, but in a week, it doesn't look more, but in a month, it begins to grow and in a year, add up. So, budgeting is key. All right. All right. Thank you so much. Now, we now know how to budget, you know, for our daily expenses of personal financing and budgeting comes to play. Thank you so much, Mukta Mohamed, International Finance and Economic Analyst for all of your useful insights, specifically concerning the, you know, gary and bins and then budgets. We'd appreciate your time. Thank you, Justin, for having me. Always a pleasure to be on your program. Thank you. All right. That's the size of the show for today. My name is Justin Akadone. Many thanks for being there. Bye for now.