We Were on Break… Then the World Exploded! — War, oil, inflation and Nigeria’s H2 outlook

[00:00:00] Speaker 1: we're not talking about how the floods lean season plus floods affecting food yeah right last year we lost about 1.4 million hectares or so to floods i think that we still continue to see an increase in food inflation so my worry with inflation numbers i think that we're not talking a lot we're not talking enough about food inflation and how to actually now curtail food inflation to to to benefits or to help the average nigerian for every price in nigeria from [00:00:26] Speaker 2: transportation to real estate is the price of the goods plus nigeria's inefficiency the wages conversation right because you are now pursuing employers to pay a wage that is uncommensurate to [00:00:43] Speaker 3: the uh production levels that they are getting as far as the regular american citizen is concerned call it whatever you want to call it macros are good markets are up call it whatever you want if gas prices are high food prices expensive cost of groceries are expensive you have failed you cannot [00:01:12] Amaka Anko: have growth without inflation that's because if there's good that people are spending more so what [00:01:16] Speaker 3: we want to be asking is our wages going up i mean as business people as people in the economy what do we want to hear from presidential aspirants because i mean election starts in august september [00:01:39] Speaker ?: so so so so so so [00:02:10] Speaker 3: hello everyone welcome to drink some mics brought to you by nairometrics in partnership with liddrop mandela's ngx yes ngx just joined as well swan water and of course we are at the yolo island so thanks to yolo beach for giving us this interesting venue we're meant to be on on recess on break but this gentleman here i'm sure you can see them would not allow us go on break we love it too much yeah we love it too much they get bored easily they're busy but they get bored easily and so uh we're here for a special um summer drinks and mics edition probably gonna be giving you some more specials like this once in a while but a lot of stuff to discuss and we're not here alone of course we've got the delectable intelligence smart beautiful amaka anko amaka introduce yourself let me allow you for those who know you and those who don't know [00:03:16] Amaka Anko: you thank you thank you for having me um i am amaka anko i lead africa coverage at eurasia group which is a global political analysis consultancy fantastic and you cover africa [00:03:33] Speaker 3: ah all right good good good so you see we're going to be discussing geopolitics a lot today of course we're going to be discussing macros and a lot of stuff going on in the country uh it's as if they were just waiting for us to take a break last three weeks a lot of stuff will happen that we need to sort of dissect of course i'm not here alone i've got the man tunji andros to my right and uh mr arnold dublin green you guys are going to see arnold in holiday mode in like no suits vacation mode you know cigars and whiskey yeah so it's cigars whiskey that's his zone all right guys let's start um been a busy few few weeks last time we the crew met amaka we i think the last last episode was a truce that was kind of like a fragile truce between iran and and the us and that's basically set the tone for what we thought would probably be um you know lower prices uh inflation coming up but now things have sort of escalated so i mean i don't [00:04:36] Amaka Anko: know what went wrong oh okay are we starting with me yeah what went wrong um so a couple things the it sounds like both sides there wasn't as much clarity on exactly what who would control the straits of homos right so that's where things started to fall apart meaning if you're iran your leverage depends on controlling the strait of homos if you're the us sort of quote unquote success depends on iran not controlling the strait of homos wow so there was some language you know not not quite so clear but what was happening in practice was that there were a lot of ships that were trying to pass on the uman side and i think iran felt like if we lose this leverage so it's a it's a nice mou there were some agreements to get some money back to iran you know some things that some people in washington thought was generous for iran but it won't be implemented if from iran's perspective given the us's history and especially the person at the top right now how do you guarantee implementation if you don't have any leverage if you lose control of this of the strait of homos so that's where things started to fall apart is iran still wants to keep that leverage the us doesn't want them to so when they were striking this deal [00:06:03] Speaker 3: didn't they think that i mean i there was one article i read one time that it was a clause that was one of the reasons why this was happening the interpretation of the clause and all that and you know around the streets of homos and who controls it like you said so the the people who [00:06:19] Amaka Anko: crafters of this so-called deal i mean i mean that's how deals so memorandums of understanding are often [00:06:27] Speaker 1: deliberately vague right right so you can read your own meaning into it the uh the point if you're the [00:06:41] Amaka Anko: the mediators want to get broad enough language to encompass both sides right so that you don't feel [00:06:47] Speaker 2: like you're being cheated and the other person doesn't feel the same yeah exactly and remember [00:06:51] Amaka Anko: a lot of usually the the language will leak which you know so you want it to be as broad as possible and so that's where the problem starts especially on issues so critical i know what does this mean [00:07:04] Speaker 1: though generally yeah so like for projections and everything so for me oil right huge oil but so going back to what um like i said about um iran not getting leverage or trying to get leverage right because they've lost about 200 billion or so of cash from the closure and then there's quite a few ships trying to go to the omand side so apparently i'm now also it's now also reading that iran wants to figure out how to control the south which is the omand side of the um of the of the straits right and chips are now going back to what it means right because the the amount of ships are going down i think there are about 36 or so ships a week average pre 7th of july now as of last week i had only 11 ships so for me it's oil right uh oil spiked with 14 over the past couple of weeks um oil projection for me i think oil goes back to the 90 100 levels um because this thing lasts it's going to go past the summer it's summer break a lot of people aren't really bothered the external guys external buffers that would have probably gotten involved german the german building starts on a break the french and the in the brits they're sort of like trying to partner with a man for the mind cleanup um asia is japan is undecided on how to support um china all china can say is guys just calm down right so for me projections mean that this uh the break of ceasefire or this war lasts through the summer because um because of everything right no one's really bothered and then oil goes back up [00:08:37] Speaker 3: so g how do you think how do you think this gets because i mean i could remember initially you were an optimist then later you know you then became a pessimist with the way the things were going here i mean it's just really very realistic uh but we've always talked about off-ramp and yeah not being any it looks like there really isn't any off-ramp here it's something that's going to take an l [00:09:00] Speaker 2: it's been completely destroyed i think i because i was i was i was taking time to observe it last week and i realized how the iranians must be kicking themselves right now like why did we persist this long and the u.s for all the troubles it's causing they too come back down now it's now it's now really at that point where backing down is too bad you know there was earlier we said you know iran won by not losing and the u.s won and lost by not winning yeah now the u.s can't back down but also the iranians [00:09:37] Speaker 1: can't back down as well because they need if they back down they lose that leverage they've lost so [00:09:43] Speaker 2: much money here's the thing here's the thing right here's the thing the war is happening on their doorstep yeah strikes are happening in iran right and the country is getting decimated as we speak yeah right the counterparty you are speaking to he's in washington yeah but like how would you feel would you [00:10:05] Speaker 1: say i've lost so much i might as well keep going let me get my reward which is what i think the mentality is like i've lost so much money unfortunately the adults in the room on the [00:10:16] Speaker 2: iranian side is the person the us killed um because really the adult thing right now to do is yes you might not completely throw in the towel but you have to offer up now it's getting worse if you're in [00:10:30] Speaker 1: you can't you can't you're like like you've lost you've already lost you've lost so much yeah [00:10:35] Speaker 2: you can't fight you can't continue fighting till the end is also not an option why not for iran yeah okay let's let's let's let's let's draw back let's draw back because you know outcomes are different for different people yeah right somebody who wants to be a matiah uh fighting to the end looks good right yeah is that possibly what you feel iran is looking at because i feel there's still some economic conversations because they've been speaking a lot more about the straits right now about how they want to control it how they want to pay the cash picking economics right because they need the money yeah so right now the off-ramp is can we find a an economic solution to this thing [00:11:26] Speaker 3: where isn't that why isn't that why it looks like there is no solution here because like you said that when you started uh your own point america wants to control straits i think it was it was what you said or they don't want to control the street but they want a street that is free of of any now iran is saying no yeah we must talk and i think you make it worse trump now says oh okay any ships that that that you know that pass the the the streets should pay us i think that was that was 20 seconds yeah that was a trump moment and then i like so you ran is like okay so somebody's gotta pay for it so so i don't know so i kind of feel like um um i don't think there is an off-ramp that either party can can implement at the moment we're not taking a major loss yeah right uh however what i think could force the off-ramp is what either side can control and that is one if oil prices saw and americans start to feel it a lot yeah um then i think that someone has got to be forced to do a deal yeah right and then if the america iranian economy crumbles like like it's almost there because i don't understand then i don't understand how you something has got to happen first i don't know which one i think the difference but i think that's what's going to be the sort of like what what ends this yeah how long it will take how long so [00:13:02] Amaka Anko: look i think the thing the thing the thing the difference here is that iran is not a it's not an open economy it's not a democratic system yeah so it has much more potential to take pain [00:13:16] Speaker 2: but we always assume we always assume that because those states look the way they do people there are not capitalists in their thinking but you see no more people that turned out that turned out for the burial of um or something yeah but that's that's who he is he's he's loved aside the fact that he was uh what's what do they call it again supreme leader leader he was loved yeah you understand so what are we drinking today yeah yeah so i brought this specially um this is a single cask uh middleton uh i mean only 192 bottles of this were made and we're drinking number 171 so yeah yeah i thought you brought it for me or something it's it's all the same it's all the same you want you want to check it out so this is you see 171 [00:14:14] Speaker 3: yeah wow 49.6 alcohol level yeah 49.6 50 percent you know that's what was absent guys don't drink a drive anyway um so let's move let's let's sort of pivot to um ukraine and and and russia yeah we've seen we've also seen an escalation of of the war as well uh ukraine armed with a lot of money from europe um stepping up their drone attacks i think it was earlier this weekend russia hit them hard really hard um no offer i'm there too so is it isn't the same thing so it's either uh putin is so under pressure and russians are worried of war on your doorsteps maybe that's probably going to end it or i don't know maybe europe or america stopped supporting but ukraine has some has nato supports i was at seven that's what i'm saying that's what i'm saying so no offram there as well yeah so are we and that's the larger question you know are we now in the from a geopolitical standpoint are we in a perpetual state of geopolitical crisis hasn't that always been [00:15:31] Amaka Anko: because yeah well fair enough fair enough i hear i i understand it's more pronounced yeah it's a big [00:15:36] Speaker 3: more yeah and more i agree i'm i mean parks the global economy a lot more yeah no i agree and you [00:15:42] Amaka Anko: know so is it a new norm at eurasia group yes at eurasia group uh president ian we've we've been [00:15:48] Speaker 1: talking about something we call the g0 world the what's right g0 g0 as none of the g's which is yeah [00:15:55] Amaka Anko: you know g7 g0 meaning that there is no one no single actor or group of actors that is willing or able to coordinate on like major global crisis to coordinate and either address major global crisis right whether it's climate change or wars right so you what you have is sort of like a a crumbling of the power centers of the established power systems and then everybody is just kind of scrambling and trump did not start it trump did not start it because it started before trump yes i would it started so it's a part of what led to trump it started in part from u.s voters feeling black the u.s-led international liberal system which was basically put together by the u.s after world war ii doesn't benefit them anymore right if you think about the 30 years of china's growth china was growing wages were slowing in the u.s u.s big corporations were making money but that aggregate growth was not actually was trickling now being delivered to wasn't being with this distributed should i put it right so the average joe feels like this international liberal it's not helping me right i'm getting poorer jobs are the industrial manufacturing jobs are disappearing right and so that's a part of what led to trump because there was political pressure from within the u.s to retreat right to retreat from the free trade advocacy you know global protection and all that stuff why are we spending money on all those people when we are losing our jobs so that's part of what led to trump and trump has accelerated is accelerating it right with what is his own should i call it what we are calling political revolution in the u.s basically right because maybe to add this element so to your point if you think about the u.s being the guarder of the liberal world order as hypocritical as it was right a part of how it worked was we are going to hold ourselves to certain standards whether they're aspirational at home right when it comes to elections you can call them aspiration but we're going to hold ourselves to certain human rights you know what's liberal or uh ideas and norms at home and then we're going to go and enforce it on the international stage okay what trump is doing at home is he's cutting all that away you know democracy no if my person doesn't win then the system it doesn't work doesn't work yeah right so forget the order you know the kinds of things he has done what we're calling you know really really it's revolutionary it's not a system things like going after the fed chair going after democratic immigration policies no not even that too but more [00:18:52] Speaker 3: more the things like attacking institutions yeah yeah yeah yeah that are basically like liberal [00:18:58] Amaka Anko: institutions going after democratic you know taking away money from democratic parties just for no reason it's more than anti-establishment it is the core of the norms of a democratic system that he's gonna okay right and the point is the more you do that at home there's no basis to enforce it internationally because if you don't believe in those rules yeah yeah so there's no point yeah so that's your point to your point that answer to your point yes i do think we're entering the system of more pronounced international geopolitical disorder so what do you think because [00:19:35] Speaker 1: what do you think of this about capital markets right because the u.s uh on the geopolitical side the u.s is the world police like you said you basically said right yeah but if they can't police themselves they don't have any time to police the world so g zero yeah right is what i'm understanding yeah and then but the world now also buys this uh u.s exceptionalism trade because i think may also because mainly because the u.s is the world police right so we will all have u.s assets we like u.s dollar for trades we have u.s bonds yeah u.s treasury bills so park is that why the world did it i think i think u.s being the world police helped helped its market he's not saying it's that way around but now if you're saying that the g zero the u.s is no longer the world police then what then happens to the u.s except exceptionalism trade it's a good question right so i think [00:20:25] Amaka Anko: this is what my view yeah it's here to stay for a while because because the u.s market is the deepest capital markets in the world okay and that's not going to change overnight yeah right so even if you want to i think that there's a lot of long-term thinking amongst asset managers in the u.s and globally about the risk from the u.s the problem is where are you gonna go yeah yeah right so it's a very very very long term yeah thing so there will be a slow movement away yeah but it's it's not gonna happen [00:21:00] Speaker 1: overnight but then you also have this interesting china yeah coming on board right so you can see the ai china versus u.s war and in japan is looking somewhat attractive in a sense right where japanese bond yields are back up again japan has been in the situation around deflation yeah for a very long time yeah and they finally found inflation japanese bonds are looking interesting do you think it flows towards asia in that sense or i mean it's going to take a while it's going to take a while yes and [00:21:30] Amaka Anko: it's going to take a while i mean i think you know there's still concerns about governance in china [00:21:35] Speaker 1: yeah yeah yeah yeah there's still concerns about transparency transparency so china is not a clear [00:21:40] Amaka Anko: alternative no uh china doesn't represent democratic yeah not for western you know so there's no clear alternative and that's the and that's the bind and that's why if you think about it up until some of the you know riskiest moments of this war it was but the u.s capital markets were sorry yeah yeah yeah despite all that there's no choice so where was the disconnect also also ai what's the disconnect why [00:22:07] Speaker 3: is it that because normally before when you have crisis like this oil prices probably would have been like 150 160 now yeah stock market probably will be crashing or receding yeah but it's not happening we live in a different world now so what so what are the what are the rules of this world that we're in [00:22:26] Speaker 2: i i think it's not i think it's not just rules so it's it's everything the the the engagements of war so naturally some of the things that inspire or inspire the outcomes of war are things like media engagements so for instance at a time where the iraq iran war was happening a large portion of non-iranian non-iraki media for the rest of the world came from the u.s and the the british yeah so whatever they told us was what we believe right so they're going to pr yeah so exactly from a pr perspective so the world looked at the war form these guys are bad we are the good guys and america is enforcing our um right uh rights yes go us now it's not so the same right it's not a situation whereby we're hearing or we're hearing the story from all the angles at the same time with different nuances different contexts you know the silly people in the room the wise people in the room you're hearing everybody unfiltered yeah yeah so it is very difficult for one actor to have many people supporting them yeah right so even in this iraq america issue right there are still people who are like us shouldn't be doing this there are people who are like iraq should chill iran should chill you know and this is on both sides even in iran yeah there are people who are in america who are saying why are we going to do that you get so that really waters down what a war would be okay back in the day it was claire they were fighting a war she's the bad person he's the good guy we were clear the narratives are now so watered down so now we don't know who the bad guy exactly so the market it's not like the market is desensitized it's just that there are too many narratives for you to heard you know have heard mentality go in one direction and that that is where the market is suffering so i believe that one thing that the market is missing probably is a different set of tools to view risk a different set of lenses to view view risk you know you always say this thing once once this goes down and then this is this is up then that means this is going to happen yeah that's not that world anymore yeah there's a disconnect yeah that's not our world anymore there's a huge disconnect and the quicker that um markets realize this i think it's the best for everyone because if you look at for instance look at look at the the young markets the young investors people are just coming to the market for the first time people are in their 20s they don't they don't really care that america has issues with iran you you know if you had to ask the average 23 year olds somewhere in texas yeah like what was the issue between america and iran apart from the fact that he might not know does he really care i mean forget it because if gas prices are yeah and you only ask because gas prices are high and he starts asking why is it high they don't say oh it's because we're fighting in iran it's like okay if you have somebody in lagos also the same 23 year old in lagos i'm sure they might not even know what's going on ask a 23 year old in paris ask a 23 year old in yeah in london so you start seeing that there's a huge population of the world that doesn't really care about this world [00:26:08] Speaker 1: it's also because people are people a bit tired as well right and the markets uh okay apart from certain commodities and obviously oil markets at some point started to shrug this off right on a micro level you know the ai rally was going on when the war was falling apart because ai companies were like we're still going to invest we're going to spend capex we still need to grow you know so it's like business leaders um the markets after a while it's like okay we need to now figure out how to live in a world where this is going on and we're still profiting and we're still carrying on so i think on that's in that's on that side as well it's a sense of fatigue with the war and trying to figure out how to place themselves despite oil being at 120 oil might go to 150 oil goes to 200 how can we survive and we we saw that in you know um oracle spending 50 to 60 billion in capex um amazon's spending 200 billion you know the most issue is biggest ipo while so this is going on so i think it's it's sort of well trying to figure out to live without live despite what's going on i agree because there's [00:27:13] Speaker 3: something someone told me as one of the reasons why you're seeing these things happen and he says to try the head he says um go and track the data you find out that more than ever we're seeing government play a major role in investing in companies yeah so either true in the us yes either through contracts giving them very juicy contracts yeah or actually investing in them you've seen government you've seen the u.s government trying to invest in intel you've seen china propping up a lot of these is local companies so a lot of countries appear to be using their sovereign investment funds as well to really push up markets and so so long as these things keep happening uh there's always going to be that disconnect between um markets and the signs that we're seeing this has always happened though i think it's like a larger scale so for me actually what was more surprising but [00:28:22] Amaka Anko: maybe not not for me as an analyst that follows sort of frontiers in africa but i think for the an average person is that usually when you have a global crisis yeah you see capital floods yeah from africa from frontier markets from ems from what is often perceived as a risky market we haven't seen that this year so so we haven't seen that as much this year in fact we were seeing you know a lot of um a lot more money going into em funds actually we were seeing if you look at if you look at say the african sovereigns that have gone to issue this year angola went and issued yeah they got a lower yield than they did last year yeah of course they're an oil producing country so you can kind of make that you can understand why that would be the case right because oil prices were high so they issued basically in the middle of the war drc issued its first ever debt um and they got a better yield than even angola guys established right so a part of it but even if you think about last year even when nigeria issued that in the fall they got a better a better deal too than they had the year before so i feel like there is definitely a little bit more of of a perception of a broader higher risk premium to u.s assets that is causing more money from the u.s it's not a lot so i don't want to overstate it exactly that was what i don't know but if you think about the u.s market uh in terms of treasuries and and capital markets it's like how much 90 trillion it's a huge market even if it's like a fraction of money that is being redirected [00:30:08] Speaker 2: into frontiers yeah it will have an impact i'm not sure there's much of an option for a lot of people so keeping money in emerging markets frontier markets seems a no-brainer especially because the amount of money you're keeping there is not really significant right yields are high yields are high that's what [00:30:32] Speaker 3: i'm saying but where's the money coming from so there is go check the the data yeah record qe yeah across governments they're buying bonds they're buying gold yeah they're propping up countries companies companies yeah taking stakes in huge companies giving up mega contracts propping up valuations so these things are not natural natural market designs and so that is why i i mean the the the reason why you're not seeing as a prime you're not seeing oil prices respond the way probably should respond how do you think it should respond about 100 and something and then now people expect that 150 160 20 20 percent of global [00:31:21] Amaka Anko: oil supply remember there was a release there was a lot of release of strategic oil reserves [00:31:27] Speaker 3: by someone exactly that is even enough to create to create that kind of panic no no i'm saying the [00:31:33] Amaka Anko: opposite it would do it would have the opposite impact on price if you're releasing more supply so that was that's maybe a part of why we had 150 110 and not 100 agreed i mean you're throwing [00:31:44] Speaker 3: renewables in there and the fact that uh dependence on oil more recently is not as much as it was uh several years ago yeah but nevertheless you do expect to have seen crude oil prices go higher than currently you also expect stock markets to have been a lot more volatile than it currently is so apart from so so now you're seeing a market where you're seeing a market where yeah no it's volatile it's volatile depending on trump's comments yeah i still say something and it goes down and [00:32:16] Speaker 2: next day what kind of market is that i still believe strongly that you guys are strongly underestimating the power of the media of the media perception perception yeah so what has perception got to do with this so the pre i remember like 9 11 right i remember where i was when 9 11 happened right right the tv screens were all this just happened and then the world was glued it was almost as if as they finished in the us they were going to come to nigeria i was in lagos by the way to see how far i was from the mayhem the chaos but how palpable the fear was and you know the way the cnn shows go like on the hour when they're talking they like they are they are rehashing the news again it's like it's happening every hour and you're it's building the fear it kind of the fear is palpable but they kind of exaggerated to a point where it almost keeps everybody uh what's the word uh uh um stuck but right now i think the problem is that as as i don't know to talk about once we're talking about the straits of almost being closed we're hearing about another opening somewhere else right and it is not open that one that's not going to come on stream till maybe but it's not guarded information that's my point right it's not like privilege back in the days it's used that kind of information would have been privileged information yeah where a select few would know and then those guys would then profit off it and make a kill it right now everybody knows so it's like yeah so do we really okay we'll be like we'll struggle for like three months right then we'll be fine yeah let's go you know because once you see the lights at the end of the tunnel and you see the solution it's not really as uh paralyzing as it would normal normally yeah but right now the challenge is oh it's not a challenge really is the fact that media or news information has been so disgenitalized that your your news outlet is [00:34:32] Speaker 3: not mine i agreed and and you think that should make things worse but anyway let's bring this back home though so i mean what does this mean for us um i'm gonna start with you so you we've seen oil prices yeah um climb back up way above our benchmark average i think we had 1.5 million barrels record when i'm gone past uh open quota yeah um yeah so let's start with the impacts on the average [00:35:00] Amaka Anko: nigerian for government that's good for government yeah exactly for nigerians we saw inflation coming down last month we're probably going to see fish if prices stay higher maybe inflation will take back up um because prices might go back up they had reduced pump prices i mean got full prices a bit but you know again i think it depends on what happens with the war right we might go back up but you know maybe more medium term it's good for nigerian assets right like companies like aradel might see another rally people who are selling off thinking oh this issue straight up almost is closed now you know um so the tiller but i think in general nigerian oil and gas assets are more attractive in the at the yeah exactly on the back of all this and and if you think about the fact that you remember nigeria sells a lot of its oil in long-term contracts so it wasn't getting a lot of benefit from high prices initially because they had three sold a bunch of stuff so so this is in this second half of the year that they can get the benefits from things that they sold i really i really hope we will and they can keep selling at higher prices for a little bit but what does that mean for us though because i [00:36:13] Speaker 3: mean they still have wide physical deficits i think we have an analysis you know that our research team did production has been good even if we're doing at at one point we still need to be at 1.8 yeah which is where the budget is anyway yeah and that's where the budget is yeah no but 1.8 the budget is [00:36:28] Amaka Anko: not crude no no yeah that's what i'm saying yeah that's the closest we've come to 1.8 yeah many [00:36:35] Speaker 3: years so we're still you know there's still a shot but but for regular nigerians who don't understand all these things so you're seeing people say you know four prices haven't come down yeah fast enough diesel price haven't come down fast enough food prices are not coming down food prices are actually going up yeah exactly which we're going to talk about in a bit but it had come down before right yeah but they're i mean they're picking up again let's probably talk about inflation now the inflation numbers that we saw yeah uh we saw a deep in core inflation headline inflation was hitting was it [00:37:08] Speaker 1: four percent or so yeah yeah so food is like 17.52 or so i mean a lot of the problem with food [00:37:15] Amaka Anko: inflation is sticky because it's about poor transportation for rural areas poor storage insecurity all those things right so those things are going to be long-term structural problems i do think that that even that higher oil prices still ultimately benefit average nigerians i get it you're not going to feel it today but ultimately the longer your currency is stable the longer you have macroeconomic stability i know you know people are like yeah it doesn't feed me what does it mean for me today but the longer you have macroeconomic stability the more likely you are to attract investments in whatever part of your economy whether it's aggregate which will ultimately create more jobs right and impact people and if your currency is getting stronger that will also help with inflation right and higher oil prices helps all the macros for nigeria so why nigeria is not feeling because it takes time how long so i would also but also i'm worried about food inflation i think we're not [00:38:18] Speaker 1: talking a lot more we're not talking a lot we're not talking about how the floods lean season plus floods affecting food yeah right last year we lost about 1.4 million hectares or so to floods right um and this year i mean i don't know what's the um what the record number is what the data is for floods but i think that we're looking at what up until august or so september for the lean season to end and the floods maybe calm down i think that we still continue to see an increase in food inflation despite i mean we had lower oil prices right so low energy prices in june obviously saw that spike uh insecurities from producers and producers and i saw it just it shows me that regardless of global macro okay regardless of the war oil goes up and down we need to figure out what to do with to food inflation which affects the average nigerian so my worry with inflation numbers i think that we're not talking a lot we're not talking enough about food inflation and how to actually now curtail food inflation so to to to benefits or to help the average nigerian so food inflation will drop will [00:39:21] Speaker 2: drop yeah when what will make it drop when what's this voice so harvest is on to what october we're entering it now we're in october we're in october now wait we're in july already next month is august so we're entering it now so my point is and harvest have a start right around august so there's no way that we see uh an opt-on in food inflation my problem my and of course i'm always worried about food inflation and it's just because of how um elastic it is a little tweak here and it's jumps you get a little increase in yeah if food inflation a little increase in press uh price of petrol it's gone up a little bit of a skirmish in one part of nigeria it's gone up you know because those prices are on the go there's no regulation there's no um structure there's no you know there's no there's nothing saying that you you you set the prices from cano and then it's going to be um measured when it gets to lagos it is how you know everybody's pricing it as they fill their pockets at at the time t yeah right so if i bought it if i bought this thing at two naira in cano and i'm bringing it down to lagos and maybe a policeman stops me and collects 300 naira for me i just added it becomes you get so there's no real structure around food which is the real problem of food inflation but we are entering into harvest season okay and i do not think the floods are significant but i don't think the floods are significant they've never really i mean 36 billion people were displaced last year so here's the thing we produce we produce we produce far enough that's a lot of people that's a lot of people so let me let me let me let me put it this way let me put it this way yeah the food wastage in nigeria is at least 50 of what we produce what we waste from what we produce as in what we produce then what we consume and what we waste what we waste is about 50 of what we produce a lot of it just yeah half of it spoils in the farm so there's yeah but that's an infrastructure problem that's what i'm saying right so the floods are uh significant but not significant enough to affect uh supply to the markets especially in harvest season harvest season is a glut they flood the market with food and that's why prices fall so i do not expect food inflation to continue to take up towards the end of the year naturally there's no time and this is not the first time we've had there's no way doesn't make it worse yeah there's no way [00:42:05] Amaka Anko: when you don't have the infrastructure you don't have storage and you don't have fruits [00:42:13] Speaker 2: i think it was around 20 i'm trying to think of the exact year where we had this type of floods uh 2024 essentially 24 was huge no no 24 was not this big i'm talking about i think it was probably 2019 2018 okay between 2018 and 2020 we had significant amount floods like this it was significant same same way yes it did affect food production but it wasn't enough not to have food prices drop because the production was still huge and we do produce a large amount of food in nigeria we just need to be able to structure it in such a way that it lasts for the entire year if we can do that then food inflation numbers would not be as elastic as they are but right now that's the problem so i mean we'll come back to this but you will see i told you that my point is i hear you but it's [00:43:07] Speaker 3: unlikely to write if i think if there's anything that's going to impact food inflation more is [00:43:12] Speaker 1: crude oil prices or fuel prices so you'll be shocked right how much because if we talk about crude oil prices we've had we had a massive uh crash in crude oil prices but food inflation still spikes yeah because [00:43:24] Speaker 3: fuel prices are still sticky they're still up they've not come down just explained it to you we were at [00:43:29] Speaker 2: 890 or eight something the woman's selling when we're decelerating was that the woman has no structure has no structure to how she prices are gary it is how much i bought it last time yeah yeah and looking at [00:43:42] Speaker 1: how much i can buy it again and add my costs that's how transportation costs is not in food inflation yeah but i'm just saying that um the infrastructure and the impact of floods should not be discounted from [00:43:56] Speaker 2: i'm not discounting it but i'm saying that it is not enough and remember now oil prices go back up [00:44:02] Speaker 1: which they are going back up and in my view oil prices continue to rise up because this summer i don't see any halt so u.s iran right i think we get the nice spike also i don't think we'll see a spike [00:44:16] Speaker 2: i don't think we'll see a spike in food inflation no no no no in crude oil prices why what's going to [00:44:20] Speaker 3: mitigate it hasn't it it has not gone up already it's gone up like 20 already yeah we expect it to be probably going to hit 100 if they if they keep bombing each other they will so let's see you see [00:44:34] Speaker 2: yeah let's see each other so monday we got another spike 100 per barrel is a significant spike right but we see how difficult it is to get to a hundred dollars no no we actually see how easy it is how now we're going to be in a hundred next week it's it dropped back to 70 it's been tricky because it's fire that's how easy it is it's not a supply issue it's a perception issue yeah but the perception is [00:44:59] Amaka Anko: markets right no but there is this i mean if if they shot there's less ships going through the streets [00:45:05] Speaker 1: if it sees fire is enough to drop prices yeah but there were a lot of ships going through yeah in that period and and now what you're seeing is ships have actually collapsed to i would say seven hundred thirty six weeks now eleven right it's only 11. even at the height of the crisis when [00:45:21] Speaker 2: the whole uh thing started yeah which was more escalated what was which was more intense at the time yeah how much were all prices i don't understand 100 or 120 yeah yeah that was the height of it [00:45:33] Speaker 3: i don't think that crude oil prices need to get to 150 for there to be damage yeah oh yeah it has to stay there long yeah it just needs to be even 1900 or 1900 is bad for the economy but guys that's it was economy for our economy that's what i'm saying so the micro the macro let's be okay yes for the micro it's just terrible yeah and let this kind of takes us to to to interest rates as well yeah and the impact that has on inflation how long are we going to keep on with with long interest rates with high interest rate i mean we've talked about it several times yeah it stays on mbc's next week so so the thing is that we're seeing we're seeing high interest rates yeah exchange rate is stable reserves at all-time high 17 or so 17 plus years high is this a norm should we is this is this like what we should accept as best we can get like no like let's so let's not let's not even bother because i mean when you ask this question people tell you well it's either you you sacrifice the exchange rates yeah right and you lose for the money policy stability yeah or you go for a lower interest rates you you can't you can't have it all if not for the war this cbo would have probably said [00:46:59] Amaka Anko: it isn't this year properly right now they'll they'll probably just hold right but if not for yeah so no it's not it's not permanent this is a you know there's a crisis how do you define permanent [00:47:11] Speaker 3: three years now isn't that permanent we're in a crisis now yeah we're in a crisis we're in a crisis i know which takes us back to the original point which takes us back to original point so the crisis now is the norm so the prices is like we're now like you said we're going to be in a perpetual crisis [00:47:28] Speaker 1: it's almost like you said regardless of this we should have low interest no no no no no i'm saying [00:47:32] Speaker 3: what are the alternative solutions now because we're now in it's obvious that we're going to be in g-zero perpetual crisis different people causing problems around the world and it's a smaller world now globally in terms of globalization so things start to get to affect everyone so before it was oh ukraine russia food prices sticky now iran you don't know what was going to happen so yeah so we're obviously going to be in this and that's what i'm trying to explain to our audience like if this is the norm yeah okay right and we're saying we don't want a cbn that does what they may feel like cbn did yeah what's the alternative are we now should we now accept higher interest should we build around [00:48:18] Amaka Anko: higher interest can i say can i say this if we look at because to your point about yes perpetual crisis are we going to keep doing the same thing yeah think about how much better of nigeria is today versus 2022. in terms of in terms of how much macros yeah macro wise not just nigeria but most of africa yeah yeah what better off yeah right macro eyes which has meant if you look at so ghana for example was at 54 percent inflation at the end of 2022 but they are single digits now they're at 3.7 they're going up from 3.7 to 3.9 or 3.3 to 3.7 sorry since the war started so how come they are there and we're not no my point is we are but we're at 15 point something inflation we were at after rebasing something i know it's true the nigerian numbers are unclear because we don't know what to compare it to but the point is in 2022 what was happening to the currency it was not it was depreciating yeah naira has appreciated since the beginning of the year despite the work naira has appreciated so my point is yeah there is a difference the the better macros the better fx buffers the better fiscal buffers has made a difference in terms of the resilience even for the average so that's that's what and and i'm saying so yes interest rates will stay high but the more you've built up your buffers the easier it is for you to be flexible even as new crises come so now that we're talking 52 what is it 52 53 billion fx reserve yeah right it gives nigeria more more flexibility to do what exactly okay so so to do what they're doing now which is meaning you don't have interest rates so i don't know hold on hold on hold on hold on hold on hold on hold on a hundred billion in fx reserve okay you can you can even ease on inflation and not worry about exiting because if they let's make this scenario enough money let's make the scenario to allow them [00:50:10] Speaker 3: cb and governor president yeah you're celebrating 60 billion dollars reserves you're celebrating exchange rate stable yeah oh yeah you don't even want you to appreciate obvious reasons but stable and all that we're the nigerians here how does this help my life what do you mean stable exchange rate 50 billion dollars or 60 billion dollars in external reserves [00:50:42] Speaker 2: import lead economy what's the benefits of that's what i'm saying so what is the import lead what is the import lead again everything you're wearing right now is everything you are right now [00:50:55] Speaker 3: now we're net exporters so what is our what are what are we important we import a lot of services merchandise manufacturing equipment answer my question what does it mean for the regular guys okay so fine textbook textbook response in moderate inflation but guess what i used to buy a bottle of water for maybe i'm just calling this out of out of 10 years now 15 or three years ago [00:51:26] Speaker 1: and it keeps going no no no no it's going up it's going up we know but it's not 15 hours to a [00:51:32] Speaker 3: thousand nine but it's going up i don't want it to go up i don't want it to go up where should it go up wait wait hold on we see the point here why should i buy him why should i buy why should i buy why should i buy tomato hold on why should i buy tomato 100 naira but you're talking crisis prices wait now you're just speaking okay okay why should i buy tomato hold on though i have exchange rates stable yeah excellent without buffers good yeah so macros excellent you agree yeah no problem oh i don't know excellent but okay okay good yeah yeah tomato 100 in january this is as an example yeah july 120. okay what does that got to do with exchange rates why why is it what has it got to do why is it not [00:52:26] Amaka Anko: wait what do you mean what has it got so why are prices why are prices what are you thinking the tomato seller doesn't have expenses so they live in the economy no so what are they what are they what [00:52:37] Speaker 2: are the imputes to the prices tomatoes that causes this because this is my problem this is my problem honestly um i greatly believe that there's no time we will not expect a crisis something will happen in fact a calm world scares me more than a world where we are settling america and iran and uh russia and ukraine because a calm world means something is boiling under and you might be in this the the center of the next geopolitical crisis right so at least it's clear and it's in front of everybody my point is this right exchange rate is stable fine right but keeping exchange rates as your end all and be all and hoping for trickle down economics because that is what you are both explaining which we both know doesn't work right trickle down economics if the macro is fine somehow somehow the micro will benefit from [00:53:32] Amaka Anko: it is am i wrong no no that's not what that's not what i'm saying okay so what i say what i mean obviously macroeconomic stability is a prerequisite to anything else it doesn't mean it's the only thing you do okay you have to start there yes does there need to be other you know a significant focus on improving agriculture agricultural productivity infrastructure yes we need all those things right we need all those things but i want to come back to your question and we can talk more about that yes it's true but i also don't think that's the cbn's job cbn is doing no no nobody says cbs job and the government should i have always argued this that there needs to be a very clearly articulated growth focus and it should probably be focused on agriculture and it should be an all of government this is what we are targeting this is how everybody should be talking about it whether it's you know i don't know if you want to pick certain crops agro processing but be very clear about this we want to grow productivity by x amount by x and this is how we're going to do it we're going to build roads we're going to do a storage i [00:54:42] Speaker 2: think that's all my only issue my major issue with what you were saying earlier is where we sort of believe that we have been able to the sentence we have been able to keep fx stable is somehow a painkiller for the pain nigerians are going through no sugar we have been able to yeah nobody says that's how it sounds like that's how it sounds like it's annoying to the average nigerian that's how it sounds like i don't know but i don't know what the heck does that mean no guys but i don't [00:55:26] Amaka Anko: show allow government intervention to take place but i also sometimes think that we play to the gallery too much no it's okay no no hold on my point is it's okay to say this is we're doing this right but here's where we can still do improve because sometimes it's like once you start saying this is going well then people are like why are you saying this is going well but it's okay i think i [00:55:50] Speaker 2: think this is the difference i think this is the difference i think this is the difference right i think this is the difference the difference is i to use the analogy that is always used on this show i think i'm not going to understand so so when we talk about the adrenaline economy what we're talking about last year and saying that the cbn uh the mpc needed to cut rates and they were like oh nigeria is a cancer patient it's just recovering so you need to give it time you don't want it so yeah so that analogy right now my child has been in critical condition you've brought my child in you stabilize my child right my child but my child is still on the table stable but still in a coma right and i come into the room and i say doctor my child is still in a coma what's going on you can't tell me but we stabilize your child the vitals are now stable i will punch you at this point i don't yes you want you you prepared that the child would have been in critical condition understand that i should heal the child what my child what my focus is my focus is on the child getting up and leaving that place that is my focus right now i do appreciate the fact that we've stabilized your child but that is not the end all yeah and that doesn't nobody said no no that doesn't concern [00:57:28] Speaker 1: me but if you keep telling me yeah no in that because it's so you're saying what's next it makes [00:57:35] Speaker 2: sense when you tell me the first time ah sir the worst is over we stabilize your child i that that makes sense that time i think i think this is it makes sense i think i would have a better analogy for this [00:57:47] Speaker 3: right and the analogy is that and that's why america is what it is at the end of the day and as far as the regular american citizen is concerned call it whatever you want to call it macros are good uh markets are up call it whatever you want if gas prices are high food prices expensive cost of groceries are expensive you have failed and i kind of think that you have failed but can i i'm sorry these are the things that matter at the end of the day so we can we can stay here and postulate on macros and which we all understand we all understand these things but at the end of the day right the largest story has to be what is the path to i agree with that lower cost of goods what is the [00:58:47] Amaka Anko: economic growth can i just i think you're asking the wrong question okay for me prices are not going to come down they're not going to come by that by that much there's always going to be inflation they're going to stop rising as quick they're going to stop rising [00:59:02] Speaker 1: it shouldn't rise but no you can't i don't even want it to rise no no that's not you if but that's [00:59:08] Amaka Anko: not economic growth that's not growth thank you you cannot have growth without prices going up yeah you cannot have growth without inflation that's fine because if there's growth that people are spending more so what we want to be asking is our wages going up yes good point right are you creating more jobs not our prices going down in fact if prices are going down you're making people poorer every time every time you pay for a goods that is higher if your tailor is charging you fifty thousand for the cloth that you used to pay twenty five thousand you're making more money so you're not necessarily no no hold on let me finish i know no no hold on i know what you're saying yes his costs have gone up but the point i'm making is that every time that you're paying more that represents more income for somebody else your macro is not showing that so i'm not saying i'm not saying your stock on three point eight nine percent i'm saying that by definition growth involves inflation no i agree because what level of inflation it is yes we we need inflation to be lower we need inflation to be lower but that's why i'm saying the [01:00:14] Speaker 2: focus should be on income yes yes yes yes yes yes yes every price in nigeria from transportation to real estate is the price of the goods plus nigeria's inefficiency every every good every service price in nigeria is price efficiency yeah so the first thing we need to do is to remove because we're talking about prices so that's why isn't this tied to wages that's what she's no no no so the wages conversation right because you are now pursuing employers to pay a wage that is uncommensurate to the uh production levels that they are getting so in a normal so you'll see are you arguing against wage growth no i'm not arguing i feel like you're arguing yeah country no think about no let me explain it so it's simple yeah if i look at an employee yeah and i see that the employee lives in x part of lagos yeah and i'm thinking there's no way this person can earn less than 300k this doesn't make any sense for this person to be to earn less than 300k and i we arbitrarily put the person's wage at 300k right now we are not paying generally for the person's talents we are paying for the person's talent plus the inefficiencies of getting the person from his house to the office yeah yeah yeah yeah yeah yeah yeah right now this has nothing to do with my organization he's inefficient the inefficiencies that bring him to work every day has nothing to do with my work you get now my office wait now yeah i'm going my office is now delivering a service and getting paid now the person that is paying me i'm having to add my workers inefficiencies that he's experiencing and the inefficiencies i'm experiencing to the customer that i'm selling to do you get now everybody is pricing in inefficiency everywhere now because the person that is getting paid once those inefficiencies are removed that 300k is not really the issue it is the fact that by the time i enter boss from 1.8 to point b and then point b there's no boss they will just increase the price and then that increases the amount he spends on a daily basis on a monthly basis so the context is if we can remove the inefficiencies in the economy clean them up how do we do that that is where i'm coming to if you can remove the inefficiencies in the economy first the wages themselves we don't even know where the wages should be because inefficiencies have riddled the things that take the wages to begin with right so now let's come back to the inefficiencies in the in the economy which is where my issue with the people that will take glory for the macros come into play because they're the only ones that can fix these inefficiencies yeah right we need more rails we need [01:03:10] Amaka Anko: better roads and storage facilities timeline for that no i don't care i don't care i'm a citizen [01:03:18] Speaker 3: i don't care that's the whole like imagine that's what i'm saying it's how things should be done give me a plan i don't agree with that one but it's not going to happen i don't want to i don't want to see people forget that people forget that let's remember yeah nigerians have been carrying the can for years yeah yeah this is not a three-year story no i think we're seeing it as this is just three years you know reform actually started from 2015. all sorts of crazy reforms regularly okay because the [01:03:55] Amaka Anko: elite nigerians are not paying taxes and mind you elites also are the ones that pave their roads [01:04:12] Speaker 3: they pave the road to their house they buy their generators they they pave their security so that's a different conversation on you for another day but my point is the people that matter here is what i'm talking about and that's why we i think one of the very first episodes or first few episodes of how the drinks are like i think it was to you who said go big or go home what's the what's the growth what's the growth agenda beyond one trillion dollar icon just one trillion dollar like or how yeah what are we going to do are we going to build sporting facilities is that the way is it tourism that is going to grow it yeah is it export because obviously not exports because we're not exporting beyond petrol beyond fuel and that's the private sector in driven initiative yeah yeah so i i i if it's got grow exports what's what is the and that's what i keep i keep saying i'm like what's the benchmark that we should measure you by yeah are you telling us that in 2024 agro exports based on these policies that we've done should be doing 10 15 annually and blah blah blah blah also what is our intra intra-africa trade boom policy yeah so how much export how much business should we be doing within africa funny enough we do equus nigerian equus equus trade with nigeria is second largest now after china funny enough which is quite impressive too yeah but then it are all these things deliberate actions of the government to ensure all these things are going and is there a way of measuring it so i kind of feel like these are the things that are lacking so when we talk about macro macro those things are just doesn't [01:05:46] Speaker 2: if i come to you going back to the analogy of my child on the on the table right if i come to you and i'm like i'm still panicking doctor what's going on with my child yeah and you're like we're trying this new therapy yeah and if we we it's not it's still experimental we're not really sure how it's going to work out but we've seen that it has an 80 chance of reviving the child she'll be able to walk again she does this this is hope my child may still be on the table yeah but this is hope i have something to hold on to what if you keep telling me but the child is stable the child has been stable since last week yeah at this point i'm ready to punch you now i'm now get good to get physical you know but i think [01:06:30] Amaka Anko: people are not listening that's why i say it has to be a whole of government and you have to reiterate the the the message over and over the new finance minister was just at somewhere in lagos saying these are our priority sectors we're going to do digital we're going to focus on agro processing like you're saying like these are the things we're going to do right now so it's the doctor telling you these are the things we're going to try right but it has to be to to your from i mean i think it has to be for me has to be a coordinated all-of-government approach yeah right it has to be a great minister will come and say the same thing this is what we are doing in the agri sector that lines up into what you know taiwa is saying and then the digital minister will come and you know like they should all get talking point and they should just say to it i know but they're [01:07:18] Speaker 3: we're doing this you can say whatever you want to say you have to be coordinated you can do whatever [01:07:23] Speaker 2: you want to do you have to be coordinated you have to be coordinated let me tell you let me tell you let me tell you let me tell you this i know you can't discuss i know you have to first [01:07:33] Speaker 3: of all stabilize the child almost yeah and then this is all yeah but the macro is stabilized now it's been stabilized for two years now that's the point so are we going to keep are you going to i [01:07:43] Speaker 2: i mean are we are we certainly for that it almost feels it's not that long it is long am i the only one that feels that we're we're trying to we're trying to set ourselves up as the fpi economy without a focus for the future because that seems to be all we are focused on trying to attract the fpi to keep going in and coming out why do you think that's all because that's what isn't that what we're saying 90 percent of the so-called isn't that what we're doing with capital invitation is just sit [01:08:11] Amaka Anko: now yeah that's the reality why do you think that's the and that's the success if that is what you [01:08:16] Speaker 2: have if that is what you have successfully achieved over three decades because then this is no more a [01:08:21] Amaka Anko: mistake it is now the design yeah over three decades decades it is not the design about decades you know [01:08:30] Speaker 3: you know what's petrifying all of this you know what's petrifying it right um no no three years [01:08:35] Speaker 2: this happened on that san we see right you're saying that fpi importation um this happened on the okay methi not so much because i mean yeah we understood but this has been a consistent theme keeping interest rates high bringing capital flows into the country it's now no longer a mistake this is the [01:08:57] Speaker 3: design so that's why i'm saying that yeah the macro the macro conversation and this sort of segues us into what what sort of i mean as business people as people in the economy what we want to hear from presidential aspirants because i mean elections start in august september what should be the conversation what should their conversation be around the economy i mean because you're not going to come and tell us oh we want to stabilize the economy we want to stabilize the macro that's not what you're going to come and tell us so so what exactly do you want to hear i want to hear a plan anyway in terms of a sector specific plan i don't know economically i think the economy in general what you want to hear what should be what what mandate would you hear from anyone yeah for me i mean you say okay [01:09:43] Speaker 1: this guy looks serious yeah plan in general makes sense but then i'll break things down to to to to sectors and what this sector needs right i'm a huge huge advocate for manufacturing i mean first of all power power has been my thing yeah where it's like we need to figure out this power power power issue power as it is right now is a huge cost and huge burden to businesses to people to every to every single person so power for me is a big deal but manufacturing being able to incentivize lending is something that's big for me right because i think lending now trickles down into incentivize perhaps the central bank finds a way to get banks to lend to a particular sector or finds a way to don't that before it didn't work it didn't work because of uh several issues that came about from whatever the mechanics was so you want several banks of course so so so so so you guys i'm a huge advocate for financial repression in the sense that you get banks to coerce you get central the central bank who versus banks who actually lend to sectors that benefit the economy whether it's services manufacturing or in the power sector but there's a reason why banks are not doing that sorry banks [01:10:44] Speaker 3: aren't doing that no there's a reason why they are not doing that why are they doing that the risk the cost of risk that's what i'm saying if if the government is high today today yeah today arnold you lend to mr tunji or mr hugo you lend him a billion dollars he doesn't pay he takes you to court you guys drive drag it for two years the bank takes it right now shareholders that can and then nothing happens but this guy's the worst case scenario yeah you're shifting from yeah i just wanted to ask you [01:11:20] Amaka Anko: so can i tell you what i will i i want to hear what do you want to hear i want to hear the how specifics yeah how yeah right and i want and when i say especially when i the how how you're going to grow the economy and i want to hear trade-offs wages i want to hear what trade-offs [01:11:41] Speaker 3: somebody comes and says if one if one of the aspirants comes and says well i want to tackle wages [01:11:46] Amaka Anko: what's i'm not going to say what does that even mean tackle wages no what you what you need to do as an aspirant is tell me about where you're going to focus government investment because what the government can do there are only a few things government can do governments can invest in enabling infrastructure like poor facilities that could help or you can invest in roads or irrigation or storage you know the things that will help with agricultural productivity or the things that will help with manufacturing like ports yeah right those those are that's where government should be playing yeah yeah and i want some i want to you i want to see that you understand those things that you understand how an economy works don't come and tell me we'll move from consumption to to production production i don't know what that means it feels like right yeah but tell me how we're going to do to make that move because it's very high level it's very you know doesn't make any sense yeah [01:12:43] Speaker 3: so how do we also move to a one trillion dollar economy because that's another soundbite [01:12:47] Amaka Anko: yes exactly i think the closest the closest tell me how what you're focusing on for me what i see this government doing that they should articulate if i were there is we're going to focus on oil and gas which is a place where we already have a supply chain developing yeah right from upstream to downstream you have indigenous nigerian oil companies that now control over half of nigeria's oil production and you are we're facilitating a shift away from iocs to them which brings money into nigerians hands [01:13:23] Speaker 3: because we're three years down the line we're still at 1.3 1.4 but go on no but now we're 1.5 right [01:13:27] Amaka Anko: the last time we should be at one point yeah i know but there's three years already in the right direction so i'm saying this is what i want you i want you to focus on building out this this value chain that's already there okay building out refineries because now it's not just dangotay's refinery there's you know seplat has a refinery you know build out the petrochemical sector now you have the more that you have petrochemicals it helps man it helps manufacturing because there's some petrochemicals that they need now that means less effects exposure for them this is all stuff that's happening right you can focus on and then mining i think there should be a government focus on building out mining do invest in geological surveys to see what we have and where we have it that will be the basis of attracting investments into your mining sector because nigeria has rare earth yeah so you think so you think mining this environment with iran war yeah where they're depleting defense systems left and right they need critical minerals to rebuild all this stuff so yeah and they need to diversify you said i've just said two you're mining and oil and gas so natural resources so because the reason i'm saying those two things is because you already have you've already built out a almost a domestic supply chain in oil and gas so zoning now focus on the gas side zoning it's working you're already attracting investment in this sector zoning it's working tell us remind us how it's working and tell us what you're going to do next zoning or mining and then tell us what you're going to do in agriculture for me that's what i want to hear those three things okay don't tell me you're going to do everything manufacturing don't give me the 10 point plan because i will remember which one is which again just tell me three things specific things of what you're going to do no seriously i'll remember those three things sanji i i think what's yours the [01:15:18] Speaker 2: the quality of political discourse in nigeria has really dropped off from the time of president the discussion the quality of the conversations around political conversations okay has really dropped off um i think it's open but go ahead the quality has increased but i'm saying the quality [01:15:41] Speaker 1: yeah the quality are you saying the quality of leaders no the quality of the conversation [01:15:49] Speaker 2: yes no look at it look at the anyway let me not go into those conversations but look at um a lot of what president nobasa was trying to do without actually saying a lot he was trying to industrialize a large part of the economy um and for me that's context still remains power transport food and when i mean food i'm talking storage i'm coming i'm focused on those three things we need to get power rights we need to get transportation right and we need to get food distribution right once we get those three rights the salary issue that we're talking about wages we can then know what wages really mean to the person yeah yeah you get yeah so and even me when i'm charging for my service to you i can now remove all the nigerianness from my wage bill or my uh opex bill and then i can really know what my my service is worth right so i think that should be the core and if you fix power and i think we already have a template to doing it honestly this is actually hilarious right so imagine if a president had coming off the back of i will make importing fuel a thing of the past right now everybody's going to look at it from the perspective that but it was dangoti that did it yes now it's somebody that would do it it's not government chicken somebody will do it right but it is now the job of the government to one find those people who can do it who have the capacity to do it who have the interest and the ability the thirst to do it yeah then give them the kind of support that they need to make it happen because they are not going to do it now dangote did not set up this refinery all by himself he got support of banks investors government everybody we came together we built this refinery we stopped importing fuel oh can i can i sorry can i ask you when you say fix [01:17:55] Amaka Anko: you said power food transportation transportation when you say fixed power what does that mean [01:18:00] Speaker 2: how do you fix power generation how do you fix power so this is this is the thing this is one thing very good question back then this is one thing i said back then when we're decentralizing and selling the jenkos the discos and i said the one thing you needed to sell first was the transmission now i generally feel that the transmission grid in nigeria for all the flak it gets can be repurposed to do [01:18:29] Amaka Anko: different things and sorry so you're saying the fix is to sell the transmission yes okay but we sold the discos yeah and the jenco yes and the people that they bought the discos don't have money to invest in the discourse to improve why do you know i'm saying the distribution so what i'm saying is [01:18:46] Speaker 2: investing no so what i'm saying is that in that in that transmission right if we decentralize transmission to the point where i am a disco i am in i'm in the keja for instance right and i am i am availed to build my own um distribution within my conflict conclave right i am built and i'm mandated i'm able to do it so if i take power to a marker's house i can charge a marker what i want to charge a marker based on [01:19:16] Amaka Anko: how i got the power that's distribution that's distribution transmission is what [01:19:22] Speaker 2: starts yes so because if if a disco if a discord it generates more than a certain amount it needs to push it here yeah so i'm saying let's bypass that here for a first level my house your house this and we are we have people doing that at small levels yes but they are scared to grow because once they grow it past a certain point they have to do those things i think there are now new laws that are enabling that but that's the first place i think we should have started instead of wasting all the energy we did in trying to fix a dead system in terms of that transmission i will push back on [01:19:59] Amaka Anko: this right because i always say when people say fix power yeah it's not that easy you to fix power because fixing power i know i know i know it's not i know it's not but the point the point i'm making you almost can't fix power without growing the economy right without growing the economy without growing the economy this is what i mean the problem a huge part of the problem with the power sector is liquidity challenges right so you have you don't have enough money what did you say all right but you don't have enough money to invest in the infrastructure you need to improve the grid itself which is required the grid still belongs to the government now exactly yes but people keep saying me i do not believe in selling the grain selling the why why online because the level of investment it requires will not be spent by private sector people good point i'm sorry nowhere in the world has that ever happened even the distribution companies now are not making the investment in improving the distribution let's allow people to do it without the grid it's yeah people are doing that already people are building in small skills you know a skate little what they call them estates here but the point i'm making is because sometimes when we say there should come in and fix power it's as if that's the agenda in itself right no i hear you but i just want us to remember remember my analogy also need that you need to have okay first i think the government needs to have money to even to invest in that bridge to improve the grid transmission and then yes to even get more electricity to the [01:21:52] Speaker 2: disclose no no right no remember my analogy remember my knowledge of the grid itself anybody that had [01:21:59] Amaka Anko: used and then you need to make sure people sorry let me and then you need to make sure that the [01:22:03] Speaker 2: people who are buying the power can pay for it there are people who are paying now there are people who [01:22:09] Amaka Anko: who are paying yeah seven now you're in band a no the band does not work [01:22:23] Speaker 2: so my point my point is this right no don't get me wrong i'm not saying government should spend money i'm saying that 10 years ago me let me give it let me stretch a bit further 15 years ago if we had been talking about petrol refining in nigeria right and we said somebody was going to be able to cough up 20 billion dollars to build a refinery in nigeria none of us would have believed today is now something we are so comfortable with that the guy is raising money to build a second one right yeah i say that it is not the government's job to find the money to do it it is the government's job to know yeah not with something not a not a public infrastructure i'm not saying i'm saying privatize the ability to get to distribution i can do i can produce as much as i want to produce and distribute as much as i want to produce as long as i do it within the regulations you've given me now let's the great [01:23:22] Amaka Anko: infrastructure you cannot build private you can have everybody building their private [01:23:27] Speaker 2: it can work within it can work within a framework there's it's not it's not that complex it's like [01:23:32] Amaka Anko: saying everybody should go and build their room so so let me let me try let me let me try [01:23:36] Speaker 2: you license every power player right no and you give that no no no no can i explain yeah so there's [01:23:54] Speaker 3: something i always see and i always say that there's 24 7 power in nigeria yeah there is if you want 24 7 power just turn on your journey and fuel it you run yeah whatever it is it will run but it shouldn't be the case so wait no so that's what i'm trying that's what i'm trying to explain to him okay so the problem is the price is the skill of the power and the price yeah meanwhile they keep telling you that or we keep telling you because i've been in power sector before that we're operating we are not operating a cost reflective tariff yeah that had always been the issue but tithe has more than quadrupled in the last 10 years yeah when i came into that sector type was like 20 something there average 28 29 or so per kilowatt hour today band a is at 250 per kilowatt hour so it's gone 10x but it hasn't solved the problem okay so i think the problem and this is the power is what amaka said earlier which is there is no funding they don't have enough funding across the value chains whether it is distribution whether it is transmission whether it is generation and it might surprise you to note that i don't know you guys saw this news the state regularly the federal electricity regulator nurk announced last week that oh they've seen an improvement in the collections that these schools are making and so because they've seen the increase in the collection of discos are making that discourse should now discourse that don't have debt or don't have that always meet their debt applications should now keep i think 30 or so of their collections in a dedicated infrastructure fund which would be used to fund i don't know what's good about that but we used to fund investments in what's not good so i'll tell you what's not good about it because i know when regulators come like this don't freaking tell me what to do with my money it's not your business you're not in my board because because there are other ways there are other ways let me tell you how to address it exactly so there's a board don't come on you've privatized it already don't tell me how to spend my money you can tell me for example you can say you know what wait wait wait wait wait wait no no no no no no no no no no no no no no no no no no no no no no no that's no no no no no no no no no no no no no no no no no no no no no no no no no no no no no we don't want to pay for the central bank today now collects deposits it's not revenue the cbn is not telling discos he's not telling banks what's to do with the revenue of your revenue or spend x amount of your revenue on capex cbn is not saying that cbn is saying the deposits is what they are sequestering and they are not telling them how to spend it it's sequestered that's different this goes what the what next said tell me which regulator in nigeria tells you how to spend your money where to put your money to put your money in capex tell me educate me tell me which one one tell me tell me which regulator tells you tell me which regulator tells you so so go and take x amount of your money so my point is this i don't i don't the logic makes sense because there is truth in the fact that there are some discos who collect money who should be investing some of that money in capex and are not doing it that's true yeah but you don't write a wrong with a wrong what i had expected is and that's been the problem with this sector very poor regulation is do you know that every tariff in the electricity sector is based on a building block and that building block includes the amount you're meant to spend on capex but in a sense sorry let me let me explain it to you you need to understand it that's what i'm trying to explain so just come on let me explain all right in the building block you're meant to have capex yeah so the way pricing is done electricity is okay how much should you spend in capex in the next five years 100 billion how much should you spend in in operating expenses in the next five years 80 billion okay 180 how much should you spend maybe debt interest and blah blah 20 billion how much should i apportion for you for inflation they're calculating maybe under 30 billion so they build that cost they now say okay on top of all that let's say the top cost comes to 200 billion okay 10 or 20 of that is your return that's how it's calculated so what they should typically do is that after yearly we come and look at you're supposed to apportion a certain amount of your money as capex if you don't apportion that that amount of your money in capex we will remove it from your tariff [01:29:06] Amaka Anko: that you can't earn and then you have different types of different companies no no no of course [01:29:12] Speaker 3: so the point which is which still happens today i still don't understand why because today today customers do you know how customers are billed why do you think you have band a band b b b and c b yeah exactly exactly so the reason the people that are bandy they are bandy because their tariff is lower yeah and because they get less light four hours per hour so for that reason they are bandy so it's the same thing so if these guys guys never never never like i think it's shameful if we that are business people sit here and see government i don't know should government come and tell you how much you spend you're looking at you're looking at you're looking at a sector that's so underdeveloped it doesn't matter that's why i'm telling you that they are better incentives for that and the incentive is okay i'm the one who approves your tariff and in the sense collecting each disco should have a different time that's what it is today anyways yeah discos have different types based on they've never had the same times they've never had the same types they all have different types depending on your complexity i told you how it's built already yeah it's building blocks so everybody has different times yeah yeah yeah depending on your cost because your the cost of operating a disco in cano is not the same as important so they all have different cost structures and then they all have different energy as well power so that is also divided by the that's why in enugu power is more expensive than in lagos sorry so why is the outcome so different okay so you're saying the [01:30:33] Amaka Anko: government should tell them to charge below costs below what the cost reflect it should [01:30:40] Speaker 3: be because it's not below cost look at it let's see this wait now see this way see this way wait let [01:30:47] Speaker 1: me explain in this people who sell these drinks operate in a very regulated environment so this [01:31:04] Speaker 3: guy comes out says this drink is one million naira per bottle okay ask me how did you arrive at one million naira per bottle oh 500k is this story is this is this and in that one million i'm supposed to spend 200k on capex over five years over yeah over five years which is 50 50 50 let's say 25 25 or whatever key per year okay at the end of year one show me your capex spend you didn't spend that money now but you collected it yeah so i understand yeah so what i would do is that in your next year's [01:31:44] Amaka Anko: tariff i will remove it because sorry it hasn't been done annually so far so that's what i'm saying [01:31:51] Speaker 3: so do what you're meant to do because what do you know what's gonna happen you're gonna end up having regulators coming to gobble up private sector money yeah in one account and then telling them how to spend it [01:32:04] Amaka Anko: you're not telling them how to spend it i feel like your your your solution is the same it's not [01:32:09] Speaker 3: the same it's not the same okay let's not encourage my push let's not give government ideas bro no i i for me why were you upset why were you guys all upset yeah let me ask that emifili was telling banks how much to borrow this industry one billion was good yeah smes i think there was one time he had sme [01:32:39] Speaker 1: whatever okay why was everybody going crazy about that if you're going to put it this way when pencom now tells pensions where how to allocate capital that's the thing that's different because it's not [01:32:51] Speaker 3: their money nobody it's not their revenue capital allocation is no revenue allocation that's my point [01:32:55] Amaka Anko: don't mix it up it's not now okay so if i'm ddisco yeah right i've made a commitment to make certain investments over five years exactly so now you want me you want as a government to force me that i must do it in year one i'm saying i'll do it over five years isn't it up to me to decide you need to [01:33:14] Speaker 3: understand how it works if you don't understand how it works you will not know that's why i said you need to understand how it works how it works is that the every year your the amount of capex that you're meant to spend yes and in fact in fact the mito law that's the multi-year tariff order which determines how types are calculated allows neck to claw back there's something called a clawback so let's say as let's assume for let me tell you how wild it is let's assume that in a year based on next allocation of your of your revenue you're supposed to make a hundred billion iron revenue that's all you're meant to make but for some reason you made 120 billion the next year neck will claw back from your tariff that's our law you don't know i agree you know because you're not supposed to earn more than a certain amount yeah that's so you understand [01:34:12] Amaka Anko: this for me it reaches the same outcome i'm okay with that no it's not it which is the same outcome because what you're doing effectively yeah is that you are requiring that they spend a certain amount [01:34:22] Speaker 1: exactly but doing it the right because if they don't regulator telling you how to spend your money i don't know i think in where it is in the stage of development it should be it should happen it should [01:34:34] Speaker 3: be a regulator should not tell you to come anyway let's move on okay let's move on so my own my own um my own areas that i kind of feel like maybe we need to see government it might be similar but it has risk my problem is the risk that's what you guys are saying no it's a risk trust me yeah but my own issue is i think the things that we need to sort out i don't even think it's power because power is there are fundamental issues that whoever it is that comes that people that are campaigning should come and tell us yeah one how do you solve transport um road problems uh road networks yeah these are the [01:35:16] Amaka Anko: things that contribute to inflation what else is there to solve other than just spend money on it [01:35:22] Speaker 3: building you spend the money now it's not just because because at the end of the day at the end of the day the reason why the reason why somebody that lives in ajangbadi cannot be at work early it's because of roads yeah there's no much transport then two insecurity insecurity you cannot you cannot say you want to do one through an economy you can't solve insecurity nothing's going to happen um education prices education is yeah how do you want to own your own inventions your own value chain your own creativity that's what makes south korea us vietnam how do you do that yeah you can't something that worries me is our health health sector housing as well those ones are not even for housing i think no i'm saying it's not fundamental because once you fix these problems those things because what it does is that remember it starts to unlock investment which is the original problem yeah housing problem is these are this and then other one is social infrastructure which is what i can you kind of spoke to earlier government has to the focus of social infrastructure is important that's why see how rails investment private business are not going to invest in rails now no not yet we're not developed enough for them to start to invest in rails we're not developed enough or start to invest in roads so do all these things then power starts out because what will happen is that you start to bring down inflation you bring down interest rates you see they borrow i have it i have it slightly i have a slightly different different different different things that happen and then we start to capital all these capital formation moves that we're doing now start to make sense i have a slightly different [01:37:05] Speaker 2: view though okay and this is going to sound very capitalist it's okay um i think we just need to find people that have money to fix what we need to fix yeah but you don't like fpi no no no no no no it doesn't it doesn't you know it doesn't you said no social infrastructure like rail yeah now the problem nigerians don't nigerians generally have is that when i create the rail and i price it at a [01:37:38] Speaker 3: certain amount thank you they are like ah thank you like this is a pure example of that because what [01:37:56] Amaka Anko: has happened to that road are they collecting toll no no no that was a different issue that was a different issue political race no no yes i agree in an in an economy that has 15 inflation you're crazy as a private guy it's going to be building roads there because guess what every year you should be [01:38:12] Speaker 3: raising your prices 15 i don't also agree in private building roads as well i don't i think [01:38:29] Speaker 2: there's no country in the world there's no there's no there's no country in the world where there isn't public pushback on social infrastructure and pricing of social infrastructure there's no country now the problem with nigeria here a lot of the times is that when that social when that uh public pushback comes the government is one unable to admit first of all that see we need this thing to work or else there'll be trouble why not that we don't have as much money as you think two even if them now there are people watching all these things that we're doing right now three which is the biggest part of it sorry what did what did you say happened let's fix what the issue is because the lucky toll gates issue to begin with there had been multiple conversations around it prior to the time that thing happened and it wasn't even about the pricing people were paying i still have like the legality of it i still have 10k in my account it's the legality of it [01:39:29] Speaker 3: because when you build a tool intercity tool yeah you provide alternatives exactly there were no [01:39:34] Amaka Anko: alternatives it's almost seemed that's the problem the point i'm making is that it is [01:39:40] Speaker 3: not something that private i agree with you on that i don't even so i rather i would rather i would rather government borrows from private sector infrastructure bonds can sort that out which is fine yeah let the government take a risk which is fine but my point is that you've got to have social infrastructure so again again that is why i'm looking for someone to come on paint it i i guess now that we'll have it now that we'll have a coordinated a coordinated a coordinating minister of the economy with taiwan now yeah so now that he's set up his own council maybe we might start to see things happen because i've always said that who who is behind a lot of the capital mobilization that is happening because you do need capital mobilization to do these things so there is pencom on one hand trying to mobilize capital in from the informal market yeah so that you can have a larger pension for like a fund government projects there is sec who is requesting for uh asset managers to increase their capital there is uh cbn who wants banks to increase their capital by the way yeah and all that stuff so so nycom is so there is all that but there is nobody that's trying to make sense of what all these things mean why are we doing this connect everything yes yes there's nobody [01:41:04] Amaka Anko: that's the issue no one is actually there's no one on the government side yes yes that's right no one [01:41:09] Speaker 1: is also everything yeah yeah there's no one no one is explaining why this is like this is why we're [01:41:14] Speaker 3: doing this so for example if you say look and then what happens we're trying to mobilize institutional capital or we are targeting an institutional capital framework of 200 trillion and in that 200 trillion this is what we're gonna do with it yeah yeah you're here telling us that [01:41:31] Speaker 1: well i think we'll go to that are you the person telling us that uh uh policy orders a regulator [01:41:36] Speaker 3: should not tell us where to put our capital no that's different now i said i said revenue not capital i said you can yeah i said revenue you can tax me you can tax me and use the tax yeah yeah [01:41:48] Speaker 2: that's what i'm saying there are different ways but don't come on tell me to imagine if a presidential aspirant had come to office off the back of i will stop petrol importation into nigeria i will stop petrol importation into that okay well they claimed it now no they know they're worried and we're doing that now they said it just the because the thing i see is that sometimes when we see government saying we will do this always almost sounds like we're saying government bring the money out of your pocket and do it the government's job is to find how it works if the person that fix it is going to be china or the netherlands just get it done right but your job is to bring all the moving parts together to ensure that it works now dangote went to immobilize the capital he went to get the investors he's passionate about this project the government doesn't even need to do anything the government just needs to make sure that ah anytime somebody gets to the embassy and says i'm going to dangotee's primary give him visa you know those kind of things right make it as easy as possible what's the next big one exactly dangotee is done now those are the next one and i think the next one the one that any government would do that will easily affect the lives of nigerians is the context of food in terms of sorry sorry so if food prices crashed which is social infrastructure yes if foods if food storage if food uh transportation so there's a particular i can remember there was a there was a military uh leader at some point i keep hearing stories about him you know bringing in there's this fish they call it um oh my god i'm trying to remember that story now but i remember my uncles used to talk fondly about it that you know the guy and this was me as a child but as i was growing up i started to understand what the guy whoever the leader was did at the time but my uncles were not bringing enough so they were saying that you know he brought in this uh low-cost fish that christ the price of fish in the market do just went somewhere got you know you know leftover fish you know things out you know and brought it into the country imported it it made fish cheap to be able to buy so people could go to the market and at least have a pot of soup okay and they attributed it to the military leader which he wasn't really doing anything spectacular right so your point is if we can point is that the private [01:44:19] Amaka Anko: sector has to step up okay no so sorry that's not how you're putting it in terms of storage in terms [01:44:24] Speaker 2: of storage yeah there are private sector actors who want to plug into that part of the economy but there seems to know what they are afraid of right now yeah is one there seems not to be any regulation around it yeah interesting because if i'm going to put my money into storage what is protecting me what is keeping my yeah uh you get all those things there's no regulation around it yeah i i see a [01:44:49] Amaka Anko: pattern that i i just want to call out because it's not just i see a pattern in nigerian discourse to your quote to your point about quality of discourse which is we i don't know we're a little bit inconsistent in how we think about the role of governments okay we're always talking about what government needs to do yeah right to drive development and then on the other hand we're always talking about government doing too much government shouldn't tell people what because they're doing the wrong thing yes but yet all our conversation about votes comes back to what [01:45:22] Speaker 3: should government be doing yes so exactly exactly why is government telling us what yeah i get [01:45:28] Amaka Anko: so i'm saying there is an inherent inconsistency in the way we talk about it can i finish absolutely not [01:45:34] Speaker 1: but let me finish let me finish let me finish and now my question is yes why aren't there more than [01:45:41] Amaka Anko: goodies because i i think i think that we justifiably talk a lot about government government what should government be doing but the private sector uncle there is a lot of money in nigeria people people who are refusing to risk their capital on long-term growth projects because they are looking for easy money in treasuries [01:46:13] Speaker 2: i will answer that one in this context of what i just said about storage how is it that i'm saying government should do and i'm saying government should know it's not it's a it's a it's not [01:46:25] Amaka Anko: okay it's generally because i want you to tell you why let me tell you why that i keep hearing governments like should i tell you why they should be doing this and then no government [01:46:37] Speaker 3: don't do this i want to answer you yeah do you know why there's only one dangotee yes why please because that's the only guy that can take on government why when they mess up with his business why why is he the only one in all of nigeria 250 million people did you know how much he spent fighting that thing did you know what he did you need to sit down with him do you know how much do you know how much hard work that's what i'm saying now so think about but this is the aggregate of the average of the many people who just want easy money it's not true it's not true don't say that you're saying it's hard you need to i need to take you to i need to take you to i need to take you to wait i need to take you to um um trade fair i went to trade fair complex a few months ago to get furniture and i saw three four story buildings of people of one guy who runs a furniture i don't know whether i've been to orcamore before his furniture mall his furniture office and that's just one of many yeah it's as big as the furniture office in orcamore because okay yes yes oh wow yeah that's what he does in the trade fair now i sat down i spoke with him we're gonna do it in fact i'm gonna tell my guys to do a feature on this thing i sat down i spoke with him yeah and i said i asked him a simple question man how did you do this thing yeah you did bank they give you loan he fell down laughing he said which loan which loan that he funds is lc himself or cash but guess what anold that's just one guy that can find his lc do you see have you seen the road leading to to to trade fair just go online and search trade fair room trade fair that is the commercial nerve center or in fact for all industrial courts industrials everything you see in the koi most of the things you see in the koi vi other parts of the country come through there all these containers that you're seeing everywhere is there there is not one single government presence so what are you saying and these are you know now achieved the escape velocity that is the kind of place that should be a complete tourist attraction [01:49:20] Amaka Anko: interesting i agree with that bro bro i agree with that i want to talk more about them you've not seen [01:49:26] Speaker 2: not see sectors in nigeria where you'll be go to markets now where the people that are entrenched in the sector will be asking you ah why are you still here when even they that are supposed to be guardians of the industry don't believe that anybody is crazy enough to come into this space come on there are too many people in nigeria who unfortunately what we tend to see many of the time is when they've now tapped out there's been no support year after year because this storage thing i'm talking about in before 2010 there was a guy that was bullish came back to nigeria you know i'm going to set up storage the guy packed up he left uh 2015 there was another lady that was doing massive storage across the country it's same issue packed up left right so there are people who are trying in their own small capacities but the thing about it is that this so one of the things i i could explain to somebody that is trying to do storage now i see don't don't start until there's clear regulation because what this [01:50:36] Amaka Anko: lasts two people is going yeah multiple taxes other people are saying don't regulate they don't want [01:50:42] Speaker 3: regulation no no no no no no no no no so what i mean my regulation is there are certain laws yeah so if you don't have that then i mean and you can't have a business anywhere that don't exist [01:50:59] Speaker 2: without without also understand that even if you're going to get funding if you're going to get funding regulation also plays a huge part in it yeah right so if you're not regulated that you're going to so everybody's looking at you like super high risk yeah how do i now get my money back [01:51:22] Speaker 3: post today sorry what's the instagram post very funny so the guy says that um that i mean a bit hyperbolic though but he says that nigerian employees are thieves and all that yeah and then he was like yeah he says the reason is because that for example he has a delivery delivery bikes he runs a i think a restaurant or so he has delivery bikes and then he sends them to go and buy fuel and all that but he then notices a pattern the your fuel consumption from mr a is there from fuel consumption for mr b right and then it's the same yeah for the bikes yes so the spending pattern are not yeah there's an anomaly for your bikes delivery he runs a delivery business every motorbikes yeah so some people are spending more yeah and then yes i mean while it's the same distance so it's not working so he can't really plan and then he says okay you know what let me stop giving them cash and he gives them etm cards and then the thing was still happening in fact he then notices that there's usually a jostle for who will go and buy for yeah within the business everybody wanted to buy for like why is he going to buy for such a big business here yeah and then one day he decides to go to the fling station and with his team and then the the the attendants didn't know that is the yoga was yeah i thought i was like [01:52:38] Speaker 2: so i'm going to make a right now for this yeah yeah and honestly the truth the truth about it is that [01:52:49] Amaka Anko: i i honestly so who solved the problem is your answer that there are many dangotes we're just not talking about all of that no no no we're talking about i'm saying i'm saying there would have been [01:53:00] Speaker 3: a lot more okay dangotes okay but what what's up in there people don't have the right environment to operate so the judiciary system is poor through crazy environment yeah they don't have social you don't have social infrastructure so government doesn't know that so that's why today [01:53:19] Amaka Anko: what's your question my question is dangote and there are others like dangote so i don't want to make him the exception only but dangote exists in that imperfect system why aren't there let's talk more about people more people like that who are existing don't tell me because because it's almost like you're saying the answer is always like we'll get the i'm not gonna to be exaggerate get the perfect environment first but we have to walk on true gum you see people what you don't what you don't what you don't what you don't you know we want more people to be taking risks what you don't understand is while the government is yeah yeah so i can i can as well [01:53:58] Speaker 3: flip the question and ask you how come you don't have 20 something else owning banks again owning banks yeah all of them in their 20s 30s when they own banks why then it was cheaper to own the bank so sometimes time and longevity makes it a lot more difficult so the top becomes very narrow so you can't have enough dangote again because this dangote that you're seeing has been working with several government agencies and government officials since the days of the military so so and that is even funny enough one of the attacks or the pitfalls or one of the things that people use against him that he gets a lot of government favors so people say that a lot they say you know he gets a lot of government favors he gets low interest rate he gets effects he gets tax rebates they say that a lot so you can't have so if you want to try and want to be like him so to be fair who will give you this [01:54:59] Amaka Anko: answer i prefer i give myself is that there are a lot of people like that we don't there are a lot of people like dangote what i mean like him is who are risking who are putting money into productive views yeah that's what we're saying yes who are regardless of yeah but the point is that they can't be a damn thing they can't scale to that level it doesn't have to be why not why not they can eventually why not how now if they can try that be yeah it doesn't have to be everybody you can have ten if they keep trying you can have five we have ten now we have ten now we have ten now wait wait [01:55:36] Speaker 3: yeah no no i don't think all the bank founders are there yeah then uh we know them well not [01:55:42] Amaka Anko: people who are moving money from one place to the other no no no no no no please please please [01:55:45] Speaker 3: there are there is there boys there you probably just don't know what we have done they are they are you probably don't just don't know them not that i mean i don't know different sectors we need them yeah they probably don't be at the scale it's not everybody there's not everybody that's at the scale of a lot mosque but there are a lot of billionaires exactly and a lot of people making an impact we need more we need more in agriculture we exactly [01:56:08] Amaka Anko: yeah so that's what you mean you guys are standing out you know i'm saying that we we want we want to spend we spend a lot of time talking about government yeah and what they need to do and i think that's justifiable yeah but i think we should also spend a little bit of more time talking about what how private sector people should be rising to the task in the difficult environment like what other people are doing i'm not saying it's doing that like people are already doing right people who are investing in you know cashew processing and then people i know i think so but we need to talk about more of this all right guys i'll be honest with them because i know that [01:56:45] Speaker 2: we have a lot of diaspora audience who are probably watching this and many of them would have put dipped their toe into the nigerian space trying to come and fix something the honest truth is that nigeria is flogging a lot of people king as in and people are chopping all kinds of cane that's why they're mad in nigeria like mad as they are chopping their cane heavily now the people that succeed sometimes are not the brightest to be to be honest they are just the ones that survive to the anyway let's let's let's [01:57:17] Speaker 3: close it because we're we have like less than 10 minutes left to go so okay let's look at i mean um q2 outlook maybe i want to start with you arnold um what are you looking at um inflation interest rate direction um capital markets do you see market market that continues that comes back to grow [01:57:40] Speaker 1: do you see interest in nigeria nigeria nigeria yeah so i think inflation inflation remains sticky inflation probably spikes up a little bit i think the war brings back higher oil prices we might end up going back to if war if the wall goes last through the summer which i think it does um before we can see another ceasefire i think we see oil prices go back to the hundreds high 90s 100 i think this trickles this this this actually then spells the rest of the economy right whether it's um um inflation right so we see a spike in inflation i think for inflation is a problem i think it's going to remain a problem as you see harvest isn't coming in september october um um i think npc leave things unchanged next week or during the week or next week um because of because inflation is at 15.91 it's not a difference from 15.96 capital markets are the same thing capital markets so capital markets we've seen we've seen an interesting inflow we've seen an interesting increase in in pension assets right um and i'm trying to figure out whether how much of that increase in pension assets is um new retiree money coming in i know we have we've had like a million or so um it is okay i don't know what you're saying i think that feeds into capital markets i don't know what you're saying so you expect you still expect a bullish capital market yeah or a moderately bullish capital market is a hard one because we've seen what 50 years today it's right i'm not going to talk for but i think we see an increase in yeah i'm so bullish [01:59:11] Amaka Anko: i'm so bullish because i think that this that's why the geopolitical risk issue yeah because i think ninja is fundamentally a growth economy i think assets are still fairly undervalued just after 10 years of nothing happening that much um i think that this ftsc issue will probably be resolved and they will still end up and just end up on the frontier index which will yeah please continue the rally so yeah and and i don't know you know i think inflation probably just keeps taking up slightly ever so slowly i'm not sure that this war will i don't i personally think that the structural forces is still in the favor of stopping the war especially on from the part of trump i know he's saying he doesn't care about mittens but he's going to care yeah he's going to care so i don't see this war really being dragging on that long to be fair i think they'll still find a way i think the us i think trump will still find a [02:00:03] Speaker 2: way to to get a deal again to tackle tackle yeah so i think capital market will still find a way to end the year strong um just for the fact that emerging markets will just will continue to get a slightly larger piece of the global pie as we enter into next year not generally because we are doing anything fantastic but we are acting more like a structured economy these days and you know that is working in our favor um inflation i still think we will find a dip towards uh uh the tail end of august uh slight not dip well just go down slightly um towards the tail end of august it's historical it will happen there's i don't think there's anything that's going to change that um nigeria's capital markets will will do well right i don't worry i'm not yeah so i i don't think i don't think i think we've passed the the worst is behind us in most things yeah it's let's come let's go back to work which we've [02:01:20] Speaker 3: already been doing but anyway so yeah all right so i have one last question for you guys um it's a bicycle kind of question about just one um so i want to know which one you're buying which one you're selling which one you're holding okay so you've got you've got a billionaire you have three choices put it in treasury bills for 17 18 percent depending on the yield car yield buy fx invest in your business or invest in business which one are you buying which one you're selling which one are you holding i'm selling buying fx don't don't respond as if he's no like as a nigerian yeah oh as a nigerian [02:02:05] Speaker 2: okay maybe you whichever one yeah as you yeah instead um you're buying fx you're selling fx okay i'm holding treasury bills in first investing in my business yes that's it yeah 100 percent [02:02:21] Amaka Anko: don't buy fx like buy like buy fx in this environment say it louder please stay louder [02:02:28] Speaker 3: all right guys let me know let me know what you're buying what you're selling what you're holding if you have a billionaire are you going to buy fx are you going to buy is it interest rates let me know what you guys think uh as we get to the end of this special episode of drinks and mics we're going to do a bit more of this uh mid-season or during this break thank you so much amaka for being uh a part of today's show for bringing it all the way down and for um tunji and [02:02:58] Speaker 2: arnold as well for driving by the way we might have one more uh in this off season it's not yet decided yet pending on it's all good all right of course we want to give special shout out to [02:03:12] Speaker 3: uh our partners uh lead drop for the drinks um we've got mandilas of course who supports us with the you know lovely air conditioning and cars toyota cars we're looking at getting one uh swan uac for the swan water that keeps us hydrated um of course uh we're here at the yolo beach resort so shout out to yolo beach or yolo island if you want to come have fun this is where to come to very serene environment yep and uh to uh the night metrics team as well for putting this together thank you all so much [02:03:43] Speaker 1: of course cheers guys cheers guys all right until we do this again next time do have a profitable day [02:03:54] Speaker 3: bye bye you