 Well, thank God we just looked at the weather and Lagos is going to be sunny today. We hope that it's going to be the case because sometimes it's very unpredictable. But right now we're not looking at the weather. We're looking at the economic weather of Nigeria. It's been said that inflation exchange rate will decline in 2014. That is according to the CBN. 2024. 2024. So let's look at that and see how possible that will be. Our guest this morning is Muhtar Mohammed who is an international finance and economics analyst. He's talking to us from Lagos here. Good morning and welcome to the program Muhtar. Thank you so much for having me. Compliments of the season. Okay, this is CBN being the prophet of good, not dope, saying that inflation and exchange rate will decline in 2024. Do you have pointers to this effect that in 2024 these things will go down? The inflation rate will go down and exchange rate will also decline. Have you seen policies that will bring this about? Thank you. I wish I was optimistic about the CBN. I remember sometime the consultant for the presidential committee consultant on tax said that in December the exchange rate will be 700 between 700 and 750 in the official and the parallel market. And today it has not changed. It went above 1000 in the official rate. So there's a saying that says talk is cheap. Anyone can talk, but you need to match your talk with action. I think that's for what we've seen from the current CBN governor is talk and we've not seen actual match up to it. Remember before now they were expecting 13 billion. That was the minister of finance to those to the CBN, 3 billion from NNPC. And they will use that to stabilize the exchange rate. But up to this moment that has not happened. And we're supposed to pay off some of the debt that the CBN is doing the banks by this money. They just did a payment of just 50 or maybe less than 5% and opting to not continue that payment. So definitely when you look at all that with what they are saying, you have cost of concern to say that you don't think this will happen. But when you talk about policies, about policy drives, then you could be optimistic in little because if you look at them telling you the minister of finance said that they may be going back to the National Assembly for a review, maybe of revenue because of the performance they've seen in revenue thus far. So you could be also be excited about that. If you look at some of this policy, the policy of floating of the net to attract investors, if that work in terms of liquidity coming into the foreign exchange market, definitely the street will go down. But assistance now we are not seeing that when you talk about inflation, the greatest fall of inflation still in many exchanges because we import a lot of the things that we eat or we consume in this country. So if you bring down the exchange rate, definitely you also be bringing down inflation. I believe that's what he himself knows that. And I think that's what they are working at. But like I said, those are all talk. We need to see the structures to guide us to us realizing these results. Before we go to some other specifics within the Nigerian context, we would also like to look at what we've been talking about even from yesterday about what they advise that is coming from international bodies like the IMF or the World Bank at this time. World Bank is telling us that we need to raise the taxes for SMEs. We need to sell fuel at 750 per litre. Even in the same breath, they're telling us that NNPC is not transparent enough, but they're still pegging some things and we don't know what data they're using. What are your comments on the advice of World Bank or all other international bodies that have been telling us things to do? Well, I think if you want to go and look at history, whatever World Bank I've told Nigerian to do has never ended up well for us. The same World Bank told us to flow the currency that we support us with liquidity. We floated the currency. We saw a Naira move from 450 to 1,000. World Bank has not done anything for us. So for me, I'm not a supporter of World Bank policy, but I'm a supporter of in-group economic policy. No economic worms on external influence or in-standard advice. Because we must ask the World Bank or the IMF what are they contributing to our economy? What have they done since we flowed the currency? What have they done since we moved subsidy? What have they done? The Naira told us to move subsidy that we have done that and they said we should caution it with some other effect so that the vulnerable will not be affected. And the government is looking at, look, if we have to continue like this, then the vulnerable we are already having, according to the same World Bank, already have 140 million Nigerians that are 20 million was added to the poverty level last year. And the same World Bank is telling us to keep increasing rates in an economy that is suffering from inflation, in an economy that is suffering from foreign exchange volatility. So I don't think the government should be listening to the World Bank at this moment. I think the government should do what normal economists will do, boost liquidity inflow, make sure you stabilize the exchange rate by boosting liquidity inflow, they begin to look at reducing costs of doing business. SMEs are already suffering and the government have seen that we will not put tax on the already tax, whether we are thinking of widening the tax bracket to get more Nigeria into the tax bracket. And that is the way the World Bank should be advising us on how to get Nigeria into the tax bracket than telling us that because they're telling us to tax the already tax because as it stands now, the informal sector, less than 10% of the informal sectors are paying tax. So what we have is the former tax sector that are really paying tax. So what are I spending the World Bank to do for us to bring us strategy on how we can track more Nigeria into the tax bracket. SMEs are already suffering from supply chain destruction, from exchange rate volatility, from infrastructure decay. And yet you are saying those same people should be taxed the more. I don't think it's a policy that I think the government should look at. On FOIA 750, I want to ask them what is the cost of refining of those FOIA, as it stands now? What has the price gone up internationally at the time? We pegged it at 600 or 600 in some areas and 500 and something in some areas. Definitely no, because the price has gone up but marginally. And they will normally forget that NMPC and its working tirelessly to make sure we begin to have internal supply of refined petroleum product. And if we are able to do that, whatever cost they think they must have lost in terms of bringing the price to 600 from 750, they will begin when we internally begin to do our own production. And so maybe NMPC is looking at the long-time future of the petroleum sector. I say, look, for now we can afford to do that by December protocol refinery will start. By January, hopefully, we begin to refine petroleum products like PMS, but that is dangute refinery. But in December, they will begin to refine other products that are even very, very important for industrialization, like diesel, patient fuel and others. So I don't think they've gone too far away from what they plan to do, but I am not a supporter of urban policy, especially when it is in those things. Okay. So a major player in this inflation saga that we're going through is fuel. And since the fuel subsidy has been removed, obviously you've seen the spike in the high cost of transportation, even food, because a lot of people rely on this product. Now, this would feel being so expensive. How can we now say, okay, we need policies that would actually reduce the inflation? Because inflation is about 27 percent. However, food inflation is about 30 percent. And since it's dependent on this fuel subsidy being gone, how do we reduce that? How does this inflation start to decline? And then obviously, we're talking about the exchange rate as well. What are the things we can actually do to ensure the decline in 2024? Let's start with food inflation. Food inflation, you shouldn't forget that we still have the challenge of insecurity in the north-east, north-central, banditry, and air terrorism. So that also is hampering production. We must also forget about the farmers-hensman crisis in Benway State, which are going to be the food basket of Nigeria. A lot of farmers have still not gone back to their farmer estate crisis there, even if it's not in the news like it used to be. That also is reducing demand, I mean, reducing supply in the market. Now, we talk about routes. The routes also are not very good, so if they arrive, they have to move their goods, so that also costs of production to go high. It's not just the fuel that costs it to go high. And also, most of these pay codes that we use or the machines that we use for production in terms of food processing, they are not manufactured yet. They are manufactured abroad. So that's where the exchange rate volatility comes in. So if you look at, like I said, if you look at all the challenges Nigeria is facing, you realize that there's always this exchange rate that is there because the cost per part are not produced. You say you have to buy them up. So when those cars break down, they have to decide for effects and fix those cars, and all that we accumulate into the cost of transportation. So, yes, food inflation is a challenge, but food inflation is fuelled by transportation. Financial is not just fuelled only by incrementing, fuelled by private increment, also in the purchasing of some of the spare parts of these vehicles when they go down. So that also is a major challenge. But first subsidy removal, yes, is a major fact. And what the government needs to do is to begin to see how they can intervene, not the type of direct intervention we saw before, but structural intervention. When we talk about structural intervention, we're talking about what are the end-use products of farming in agriculture. Are we going to bring those government can intervene in terms of subsidy for agriculture? Is it in the area of providing the fertilizers, is it in the area of electricity either by solar system to this rural area so that we have more time to do more production and others, and then most importantly, security. So those are for the agricultural sector. That's what I think governments should do, and also begin to think of giving farmers self-loan through the commercial bank. I'm happy that civilian and finalists say they will not give loan to anybody because they don't have the, they don't have the, the, the, the, the, the, the mortality to, to get back those loans, so they will move through commercial banks, even if they are going to exchange an intervention to commercial bank, which I think is very good. It could come up with a cultural loan that we've seen before, and then begin to test commercial bank to loan it to these farmers on a single rate. But we seek money to make sure that they are given to do that. Really, farmers, not politicians. That will drive them course. Therefore, in exchange rates, we need to attract inflow. And there are four major ways that we attract inflow in Nigeria. We attract inflow by direct foreign investment. We attract inflow by portfolio investment. We attract inflow by remittance from Nigeria in the diaspora. And we attract inflow by the sale of our good oil and also other treats non agricultural trade, which in terms of inflow effects is still far, far away from what we get in the in the petroleum sector. So what the government have said that next year we have a production level of 1.78 million bara per day. Remember in 2023, we're looking at 1.38 million bara per day. We couldn't even achieve that. But in fact, the bara per day security has improved. And so we have to keep it high of that measure we maintain. We are able to maintain that 1.7 million bara per day that will attract a lot of inflow. And not to forget the game now we have the primary refinery like Dangute also will be exporting refined petroleum product out of this country. We are tracking inflow that also will help us attract more dollar into our economy. Nigeria in the diaspora, they are just settling them. But because of the volatility of the exchange rate, a lot of them still go through other parties rather than before that they have to remit through the banter. The banks keep people through the normal exchange rate. So a lot of them are remitting through the parallel market. And so that is not attracting the kind of inflow to drop down the exchange rate. I think that government will need to work on that. But fully investors are not the only way government can work on that story is to make sure there is stability in that space that both the parallel and the official power and the only way you can do that is to attract liquidity into the system. Now you look at the other aspect again which happened to be foreign direct investment. Throughout the eight years of President Buahari, foreign direct investment keep diving to that point. They are non-existent so we need to begin to track foreign direct investment. And the only way you can track foreign direct investment is first of all come up with microeconomy stability. And that will also go down back to the exchange rate. Hopefully investors the same thing. If you want to attract them, our equity market has been driven largely by loka which is very very exciting for me which makes it very good for me. I was wished that most of the sector of our economy has been driven by lokas. You can see the kind of bullish we've seen in the market because there's no panic in terms of remitting your fund to various countries because you think there's an external problem, election is coming, there is banditry in the north, even if it does not affect later. So all those things you saw the market enjoying loka protein agency, the movements. But again the market cannot be an isolation, it must be a global player. So you want to attract portfolio investors. Then you must create that, go back again, you must create that external stability for portfolio investors to come in. Because if they have to come in at a rate, they make sure that it is stable so that when they make profit they could be exiting in that rate also slow. Those are the challenges that are announced for us in 2024. What I expect the CBN to do is to make sure that the clear of all backlog, especially in the aviation sector, if you clear that backlog you attract liquidity into the system, you attract more foreign airlines into the system, not basically Nigerians are the highest, they pay higher in coaches than any other country in Africa. So but if you clear of that, that rate will come down and then most of its airline don't collect fees in Naira, they want to say no, they make it in such a way that the dollar is cheaper than the Naira. So you have no option than to sort for the dollar to make it cheaper for you. So all this would be addressed if the CBN attracted liquidity into the system and destabilizing the city. That for me would be what they should think about track 2024 and if they do that automatically inflation will come down. You see Ghana was in a height about about 30 something percent in days of inflation. Today they are doing about 20, 23 to 23 percent because what they just did was to fight their estimated volatility on government intervening key sector of their economy and today the inflation keep going down in Ghana. Okay, well thank you so much. It's something about 2024 which means we've not had the last of it. Like you said we'll be watching and possibly we'll add the praying as well that things will work out well for us because otherwise it will really be a tough year 2024. We'd like to thank you for coming on the show this morning. My pleasure for having been good morning. Thank you. Okay that was Mokhtar Mohammed international finance and economics analyst talking to us from Lagos State here. We'll take a short break and when we return the second hot topic we'll be on the stairs.