 And it's time for our second hot topic. The NARA appreciation witness last week seemed to be short-lived as the currency resumed a fresh crisis this week. It traded around $890 to $910 to the dollar from $820 NARA that we saw it trade at last week. Well, that's what we want to take a look at right now. Frank Eliana, Technology and Media Editor, Business Day, is our guest for this segment. Good morning to you, Frank. Yes, good morning. And it's always a pleasure being on the show. Always a pleasure having you, Frank. Let's go straight to brass tacks and find out why we're witnessing this fluctuation again. What is responsible for this one we've experienced this week? OK, so many things. Let me just highlight, say, two of it. One is the money that the federal government collected that's the $3 billion that the NMPC reportedly got to help strengthen the NARA. Many of us knew that it was going to be a short-term measure to solve what appears to be a fundamental problem that Nigeria has. It's not what we're dealing with is beyond what we can just throw money at. But then the federal government felt like getting that money, the $3 billion could help in the interim to just reduce the inflation that the country was facing or the economy was facing. And it worked for the period that it worked, but the demand in the market is much more than what $3 billion can solve, which means that you have to go down to the fundamentals to address the real issues that we are having, which is that production is very low, which is that the manufacturing sector isn't producing at the capacity that they're supposed to produce. And then also, the second leg of that would be that investors haven't increased or grown their confidence in the economy. They remain bearish even with all the reforms that the government has churned out in recent times. Investors are not really convinced about the depth of these reforms, because the reality on the ground is different from what is on paper. And once that is the case, it is often very difficult for you to convince an investor to bring out money to invest. Don't forget that many of them are there for a long time. And then there are also those who are portfolio investors who just want to put in money and take it out. But they have to be assured that there is an exit for their money, even if it stays in your economy for three or four or seven years. But they need to see a clear roadmap that this is what is going to happen to the investment that they have made, and this is how much all the earnings on the investment. So that is what we're facing currently so far. OK, so let's look at the distortionary effect of this exchange rate volatility. These relentless gyrations, as we see it, can deter FDI, can't it? Absolutely, yes. It will definitely not help the FDI that we're trying to attract. And FDI is also a function of investors' confidence, investors coming into your economy. If they are able to bring in money, that's when you're earning foreign direct investment. Also, FDI can also be from your manufacturers, from your local economy or your local industries, being able to export their produce at the international level and then earning revenue from those exports that they've made. So far, we haven't increased our export ratio. Much of the things that we still use, much of the things that we still sell in the market are all imported, say about 80% of them. So we are imported dependence to you. And that hasn't yet been addressed by the government. And so it is difficult for us to earn foreign direct investment at the level that we expect to and at the level that will help the economy to or at the level that will impact the inflation that we're currently facing. So yeah, definitely FDI is going to be affected. So that's exactly what is happening. What's your assessment of the CBN's intervention? The gap between the official rate and the black exchange is still giving them headache as it appears. Yeah, so absolutely right. I think today's story on Business Day, we heard that the parallel market were buying dollars at 895 Naira and selling at 905. That's according to data from a Bokeh FX. And if you counteract that with the data that the CBN has, which is about 800 and lower than that, almost 80 Naira difference, you see that arbitrage is continuing to manifest despite efforts by the CBN to rein it in. And what causes arbitrage is dollar shortage. If you're not able to supply the market with enough dollars, the market here being the banks. And the other day we saw that the CBN has approved that the BDCs will come back and given them limits of what to do. All of that trying to just ensure that everybody plays at a certain level that encourages the exchange rates to unite. But it is doing one thing, but on the other side, you have the trust issues that people have always had. If I have money, sorry about that, if I have money and I want to exchange it, will I want to go to the banks to exchange it, knowing that there's a possibility that the banks may not have the dollars that I need or that I may not get the rate that I want to get it at the black market. So there's still the black market influence that is driving a lot of all of these transactions. So and that, like I said, is a function of the trust that those who have the dollars have in the market. The manufacturers continue not being able to assess the dollars because they need it to go and buy and to get supplies. And many of them are eager to buy at any rate. So whether you're selling to them at 900 Naira, whether you're selling to them at 980, but they just want to be sure that you have enough dollars that they need to require to import some of the things that they need to produce their goods. And many of the banks don't have it. So what's the point of them going to the banks that there will be a limit to how much they can get done? Going to the black market where it seems like there's enough of the supply that they are looking for. So that's what's causing it. And when you tend towards the black market, of course, the black market will have to make a margin from what it is that you're taking from them. And the extent of that margin would depend on how much you are sourcing from them. So that's what's been affecting the market. Again, it boils down to it is not a job the Sibian alone can achieve. Good enough, we now have ministers. You will expect that all of them will begin to pull their weight, all of them. I know there are some people who have marked out some critical sectors to say, these are the sectors that need to be focused on. But I think that every ministry, every minister, needs to be on top of their game. And there needs to be some collaborations at every level to ensure that everyone is productive. And this is not a period to wait for, say, in the next 100 days or whatever before we start seeing results. This is a period where we want to see results in the next one month. And that would depend on what you are doing as a minister, how you're able to coordinate, how you're able to implement existing policies. Because it might be impossible for them to create new policies right now. They can go back and look at some of the old policies that have been made by previous ministers that have been in that position, and try to maybe implement some of those policies that they know that are friendly to the market, some of those policies that they know that will encourage trade activities in their ministries. So everybody has to be on board in order to increase productivity in the economy. That way, it will reflect on the books of the CBN. There's only a limit to what the CBN can do. They can't continue pumping money into the economy, even if they print a more naira. It will not ensure that there will be dollars in the market. So it becomes a challenge that should be addressed immediately by those who have been appointed as ministers to do that. What would you say, Frank, should be the realistic exchange rate for the naira? At this point, I don't know. I can answer that question with a straight face, because the floating has sort of distorted the market. And unless we address issues around export, I go back to export, because that's for me like where we need to address to getting foreign direct investment. When you get a foreign direct investment, then you can start to address some of these issues. Again, I'm also thinking that Nigeria could have also leveraged the BRICS summit. I see that Saudi Arabia, I see that some of the countries are beginning to look towards the BRICS. But Nigeria is not part of it. Exactly. So what am I talking about with that? Look at the kind of policies that they're looking at. They are trying to reduce dependence on the dollar and start using trading with their local currencies. Imagine what would that would do for a country like Nigeria, where instead of killing ourselves over how much dollar we don't have, we can then start using our naira to trade with other currencies. That, for me, is the lowest-hanging fruit right now. That Nigeria can leverage, go to the BRICS, bury your shame. What if it is that the politics between Nigeria and maybe South Africa, both of them can work together at this point to be part of that group. And by so doing, we start seeing our naira strengthening. People can then start looking towards coming into the country and trading with the local naira, and trading with every other currency that are owned at the BRICS arrangement without having to worry. Do we need to exchange it in dollars before we make our payment? Look at China. Look at Russia is there. You have India there. You have Brazil there. You even have South Africa. We have a lot of trade with South Africa. So it is actually a very good opportunity for Nigeria to leverage and strengthen the naira. It's not always about looking at what the dollar is So tying ourselves to the dollar is actually not doing us very good favors right now. And what I would mean is that what if our IMF tells us, what if our World Bank tells us, that's what we're going to do. Because these guys are tilted towards the West. And of course, they would expect that we should always use the dollar for every transaction that we're doing the naira. But if we sort of start getting our relationship right on the other side as well, we can balance some of these things and then ease off these pressures that we're currently facing. Why is Nigeria missing out the BRICS? I can't say I know exactly why. I don't know if it's a thing of pride. I don't know if it's a thing of... I don't know why we're even proud in the first place because we are at the base level. We are at the level where it's like a beggar or somebody who is down. It's just not a place for you to go. It's either you're reaching out to somebody to pull you up. So whatever it is, I don't think it's necessary right now for them to even consider whatever it is. It is, hey guys, how do I become a part of you in the latest icon? You know, they have scheduled next year for the new members to be included. But I know that those new members that have been indicated interest will have some arrangement for them with the new policies that has been marked out marked out by the BRICS. So they can start to trade even before becoming formerly members of the BRICS. So I think it is critical for Niger to start thinking towards that angle. How do we start trading with our local currency? It is what Africa actually needs at this moment. I mean, think about the fact that if you want to go to Kenya, for instance, you want to use the Naira, you can use it there because you first of all have to go and change it with the dollar before somebody will give you the shilling. And it doesn't help our local businesses. And I think every African country should actually be thinking, how do we trade between each other and not have any incumbrance with the dollar? Leave the dollar where it's supposed to be. If you want to go to the West and trade with them, then you can start thinking about how do we use the dollar. But when you're in Africa, dollar shouldn't be a problem. But it continues to be even with the Africa for trade and policy in place. We haven't gotten it right. We are still suspicious of each other. We are not even moving closer to each other. To travel to South Africa, you require a visa to travel to some African countries to require a visa. All of those incumbrances is what is limiting the continent from moving forward and also limiting the giant Nigeria as it likes to call itself. But Nigeria needs to be the one now to make the first step towards all the African countries to say, let's do this because it has become critical, not just for them alone, because it is now in our own national interest that we start trading with our local currencies. I think that will bring us the FDI that we're looking for. Imagine a period when we start having different local currencies and we can then denominate trade in those local currencies. It also means that our businesses from here can be free to trade in Kenya, can be free to trade in South Africa, can be free to trade in any country that they choose to, and money would not be the issue, that they don't have dollar would not be the issue. They can just walk in there, exchange their Naira with the local currency there and make a trade. So I think it is possible, I think it is urgent, and I think it's something that the government should critically look into and try to be a part of. Okay, Frank, just before you go, what's your take on this revelation by JPMorgan that our foreign reserve may have dropped from 37 billion dollars that it was when President Uluxiago former president Uluxiago passenger left our face to 3.7 billion dollars? Oh, it's absolutely important because I saw the rebuttal by the CBN saying in effect that JPMorgan was trying to just be ridiculous or maybe cause trouble or something. But I didn't also see them say that JPMorgan was lying. What they said was that JPMorgan, or that the money that they have or that they are owing is still say the, they're supposed to pay say in 2027, that you cannot come now and say that they are, that you might lose the money from 2027. You have to wait for Nigeria to get to 2027 before you find out whether Nigeria can pay or not pay. So you cannot minus the money now and say this is the balance that what Nigeria has. That as far as they're concerned, that Nigeria has, if Nigeria has 20 billion dollars, that's what Nigeria has. You can't say that Nigeria has less because Nigeria is owing different people and have different commitment that it is owing. But I think that anybody who has borrowed money before knows that if you have not paid that debt, the money that you have is not your money. You are effectively, of course, you are effectively holding all that group of money. Exactly. So. All right, Frank. Time will not allow us to dig deeper because we just have to wrap it up here. But thank you so much. It's been so amazing listening to you. As always, very enriching. Frank, thank you. Thank you. All right. All right, Frank Eliania, technology and media editor. Business in his paper has been my guest on the second hot topic. Well, thank you so much for your time on the breakfast today and throughout the week. On behalf of myself and the crew, on behalf of the team and Yamgo, I say thank you again. And do join us next week for another episode of and series of the Breakfast on Plus TV Africa.