 You're welcome back. What we're going to be looking at now is the fact that inflation rate has risen to 26.72 percent and food prices have also soared. We are going to be talking with Bollahon or Lojede, a public policy analyst, who will be talking to us from Lagos here. Good morning and welcome to the program Bollahon. Yeah, thank you. Good morning. I wish to be on the program. Yeah, it's always a pleasure having you join us. Okay, right now 26.72 percent is scary. Let me get how you feel about that and what maybe you think led to this. It's a very worrisome situation. It's also not unexpected. The circumstances that led us to where we are right now have been brewing over the last few months. So we knew that we were going to get something around this period and that things were actually going to get worse before they get better. So that it is what it is. That's where we are right now. In fact, what some analysts might have said is that they were surprised that we have not gotten to this junction earlier. There were people who had thought that by now, even by last month who will have been here, and maybe by now will be like 27 percent inflation rates because of the various issues in the economy that are pushing off those general price rates within the system. Okay, am I supposed to be happy or even more scared by what you have said? The suggestion is not to scare you. It's to say that because it was predictable that we want to believe that the decision makers are watching that space and making efforts to see how this painful period could be as short as possible so that we can turn the table and begin to see the other side, which is a gradual decrease in that inflationary price. But for now, it is what it is. One of the things that we need to pay attention to though is the fact that the inflation, the composite inflation number, headline inflation number, has given us the analysis of that number has told us exactly where the problems are. And then we know which part of this problem we can begin to intervene in and use that to moderate the inflationary price. While we're talking of 27 percent or 26.72 percent, full inflation is 30.630. So that is one of the clear indicators, clear leading factors on what we have seen as the composite number. So the message losses, if there is something we can do about food inflation, which is 30.64, if we do something about that, it will bring down the composite inflation figure that we see today. Okay, you said it will get worse before it gets better. You seem to be confident enough that there are things that were put in place that will make it get better after some time. Some people are of the school of thought that the policies that were put in place will make it worse and get worse, not get better at all. Where do you stand? If you stand on the positive side that it will get better, what are these things that give you that confidence that it will get better? Okay, like I said, we knew exactly how we got here. The energy cost was a critical factor. So full subsidy was removed and the energy costs went up dramatically for everybody. The other part was the exchange rates. It was indeed to Ross was to have increased the exchange rate of the Naira to major currencies across the world. So those were two factors, very major factors. So the question is, what can we do to moderate this problem? Number one, it is obvious, forget about what Fisher-Potter is saying about the first subsidy not having been intervened. I think there has been an intervention in the first, well, subsidy issue because the cost of PMS has remained the same when Naira was 700 and now that Naira is 1000. So in the real sense, there was no way on earth that a product that is important, that the price of it will remain the same when the exchange rate is 750 and when the exchange rate is 1000. So obviously, there has been an intervention to ensure that the price of PMS will not go worse. That is one on one side. On the foreign exchange side of things, it doesn't appear as if much success has been achieved yet. There were issues around Afraxim providing us about $3 billion. I don't think that Afraxim has been able to shop for that money yet and put it on the table. I don't think that has happened. Recently, there is also a World Bank 1.5 billion dollars. It is possible that that will happen because the World Bank can put that on the table. I also believe that the fact that oil production has been improving, we are as per told, it will also help in a little way. It is not improving the way we expect. We would rather have seen a rev-up of production much faster than what we have seen. But the fact that it is also improving gradually shows that some addition to the supply side of foreign exchange may begin to happen. But if you ask me, the supply side is not happening fast enough, maybe further intervention might be required, including probably asking IMF for some money. It is a possibility. Where we are right now, I don't think that any possibility should be taken off the table. I understand perfectly the issues around our debt profile, but at the same time, we need to solve the issue of the stability of the NERA or the increasing depreciation of the NERA against major policies. If we cannot fix the supply currently enough, one of the options to fix that supply is to actually get more money from where we can get more money. And IMF comes across to me as a possibility. The other part which I have mentioned is to just look at the breakdown of that inflation figure. We have a headline inflation that is 26.72. But food inflation is 30.64. What that says to me is that if I can bring down the food inflation, I will bring down the general inflation level in the economy. It is no greater. So I can focus effort, I mean government can focus effort on what it can do to bring down the food inflation and it will help it to moderate the general inflation trend that we see in the economy. I wonder how that will be done because the food inflation is also tied to a lot of other things, effects that you have mentioned and so many other policies that will make the people who are supposed to produce this food to find it really really difficult. I'm just wondering why is it why does it always have to be a secret if the government is having an intervention in the fuel for instance? Why are they hiding it? And you know we found I was just telling my other guest that we found out that on the budget of 2023 from January to June the money spent on fuel subsidy is almost the same amount above in excess of three billion. Almost the same amount that will be spent on palliatives, the so-called palliatives that are not even getting to a quarter of the population in this space of three months. So the government spends XYZ amount of money for fuel subsidy from January to June which is six months and spends almost the same amount of money on palliatives for three months and when you call that a good policy has fuel subsidy removal even helped us in any way? Well what you have referred to um you know let's just use arbitrary number. You're saying uh we let's say we save three billion I'm just using arbitrary number from subsidy and that we are located at same amount now to palliative and nothing has changed actually something has changed it is what has changed is the real location now under fuel subsidy um I have a fuel ghost now I write the fuel ghost and I also have a a a neighbor who uses the motorcycle I get probably four times his subsidy under the fuel subsidy the amount the benefit to me is probably about four times what he gets when he uses an Okada under a fuel subsidy regime under a palliative regime I'm not even going to show up at the window where they're sharing palliative but he probably will show up there and get palliative so there has been a real location from something that benefits the rich more to and shifted to something to benefit the lower rung of the ladder the more so they say there's a real location that is not exactly right to say it is the same thing by virtue of the real location I have just described now however there is a room for a whole lot more to be done and that is what everybody um is still waiting for you spoke about food inflation uh food inflation when you go through down into the report you see that part of the food inflation was talking about potatoes potatoes are not imported so far I think some of the Irish potatoes are still imported it was talking about yam and other tubers it was talking about fruits meat vegetables milk egg so most of these things uh it's not all of these things that are imported you are not into all that as well let me come in there I'm a I'm a village man so I know how this food comes to be uh there used to be a time where if you're planting your yam farm or cassava farm or whatever farm it's the knife and the hoe that you use nowadays nobody uses knife to clear their farm they use herbicides to clear the farm at least the initial clearing you'll use herbicides and you clear a large expanse of uh farm now a a container a one-liter container of herbicide I always use this example a one-liter container of herbicides two years ago used to be 1000 naira some places you get it for 900 naira now it is 5000 naira so whether or not the Irish potato is imported from another country the fact remains that for you to be able to plant it you need things that will come from outside our country you need fertilizer which we do not produce we we have to import so if the effects goes up and everything that is being imported into the country goes up these farmers will still suffer except you want them to go back to knife and hoe which will make the production smaller so if you're harvesting like 100 bucks of Irish potato or whichever potato you were harvesting you will be harvesting like 20 which will still lead to a shortage of this food and the inflation will rise so it is tied whether it's produced here or not it depends on things that come from outside so when you say yes so that is what it is it's easier the analysis is saying we have identified that food inflation alone is 30.6 yes that if you're able to intervene in food inflation you moderate general inflation correct so you have spelled out areas of possible intervention to make the food inflation get moderated beautiful so you're broken it down that the guy needs a habitat so that's an intervention area for government you mentioned I need that but in it but like that that's an intervention area for government he would transport food from where it is produced to the market so maybe it's transportation cost as as as reason that's an area of intervention but for the government there is similar area of intervention that has to be simply releasing certain product from national reserve if I take a maize for example maize is a very important component that goes into animal feed yeah so whether you're talking of production of a poultry or pigry or all those other other things yeah animal food generally now maize is a product that the Paraguay store the national reserve hopefully if they have them so if prices go up too much an intervention to moderate price in such situation please some product from your country and have to deflate that pressure so the opportunity for intervention in that food space is there it is for us to work it out and make it happen bring down that 30.6 for drag it down all the way to to to 25 and and you will have solved a whole lot of problems and reduce the pressure that is on the composite okay web you've been talking from a point of optimism today and I I like it so much you are the expert so let's just have a final word if there are things to have you have left unsaid that the government can do that will give us lights because a lot of people are not seeing that light at the end of the tunnel just give us those things in summary now as we wrap up okay for me the low hanging fruit is to look at where the biggest pressure is coming from and it is food and the government was after said what can it do in that space because that is where the biggest pressure is coming from and number two is the direct intervention of government even in that space by by getting involved in this 500 000 hectares of cultivation that he spoke about in July I remember the president saying that here is the reality about food products if as at May 29 when the president was sowning that speech of July that we have started to implement it if corn has entered the ground if rice has entered the ground by the end of May by now we will begin to see the output of some of those products therefore government must move faster on some of this initiative I want to plant I want to plant stop take it away from my want to and get into the farm and do the plant I want to improve infrastructure that links centers of production to the market get into the space and begin to improve on those on those infrastructure whether it is storage or the road or whatever the earlier we move into all these things the better for us a second thank you so much Bola hon for your time this morning and trying to help us make sense of what we were discussing here it's always a pleasure having you thank you yeah thanks for having me okay that was Bola hon our Lord J. Day public policy analyst talking to us from Lagos here we'll take a short break and when we return we'll be looking into our second heart topic stay with us