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Hipoks. Welcome to my podcast the
way I see it. My name is

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calu Aga and well the Nigerian twenty
twenty four budget has been passed, so

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good job. But now the real
work begins. I want to take a

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look at the metrics, we say, the marcroeconomic indicators from the year twenty

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twenty two. Let's just pick December, say last in December in twenty twenty

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two and compared to December twenty twenty
three, just to have a sense of

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the scale of work that this administration
has in front of them and to sort

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of lead the framework of what Nigeria's
will start to see in the economy going

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forward. It's not a pretty picture. Let's take it one by one.

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Inflation year ago was about twenty one
percent twenty one percent a year ago that

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December twenty twenty two. Today it's
about twenty eight percent twenty eight percent.

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So if you had money in the
bank, if you were on a fixed

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income like a pension and all that, you've lost purchasing power. And it

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gets worse if you look at the
food infliction numbers. Twenty four percent December

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twenty twenty two now thirty two percent
December twenty twenty three. Why is this

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important? Like we said, you've
lost purchasing power, but it destroys any

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idea of savings and planning. I
mean, how can you plan with twenty

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eight percent inflation? What's your bottom
what's your hedge? It's difficult to incentivize

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savings and the economy doesn't save then, of course the economy doesn't have disposable

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funds that borrower as all lenders can
interplay with and create wealth in the economy.

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So a big problem their internet simipulation. What about the exchange rate exchangerate

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to the dollar a year ago four
hundred and sixty one, today's about nine

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hundred and seven, So big jump
there. The jump, of course explained

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by the float of the Nyra,
in which case the peg was removed.

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You want to say it's clear,
you will say the subsidy on the dollar

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was removed. Hence the nira is
reflecting its real exchange rate. Again,

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nine oh seven is the official you
know, the CBN average price on the

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streets of legos and the streets of
administ to Nigeria, the dollar goes about

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a twelve hundred thousand, two hundred
part US dollars, so it's very weak

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and it reflects the lack of supply
of dollars officially into Nigeria, so very

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very weak. There. Let's take
a look, should we say at the

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GDP or the GDP growth rate,
how much out protest Nigeria producing a year

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ago were three point five four growth. Now December we're two point five four

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percent growth. So growth has stalled. Why has good stalled the niger economy?

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It's not really an oil gyber economy. Well it's about less than fifteen

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percent of GDP. But the trade, the telecoms side, those have been

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hit hard. But lack of purchasing
power of Nigeria. We see minimal nationals

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leave Nigeria. And also agriculture has
stalled with insecurity in the food baskets in

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Nigeria. And that's what you're seeing
reflected in the GDP growth numbers. The

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largest contributors to GDP agriculture, trade, telecoms are really not posted stellar returns.

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The retorts are coming from say banking
and all that, and while that

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is good, they are contribution to
the overall economy is not as large as

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the agriculture. So you have seen
those numbers not showing up. Intel GDP

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growth as we should want them to
Remember, Niger the largest economy in Africa.

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The population grows about three percent or
so, so we should be growing

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more than the population to just keep
pace and create jobs for the new Nigeria's

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as they say, so disappointing numbers
they INTEGDP growth. And what about external

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reserves? This is the really the
claims on imports right that the Central Bank

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of Nigeria manages. So rest when
I sells crude oil or Nigeria exports,

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reserves get built up and those reserves
are held or managed by the Central Blank

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of Nigeria. Last year we're about
tenty seven billion US dollars. Currently this

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year we're posting about tenty two billion. Again, if you've been following and

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you've seen the reports that gipanas done
the reserves, how most of the is

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have been spoken to or tied down
by borrowings made of balance ship by the

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Central Black of Nigeria in terms of
swaps and in terms of forwards that have

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not been cleared. You would then
see them this today two billion if you

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metted it off. Those claims that
we haven't seen materialize on the books of

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SEBN. Well, looking at anywhere
from twenty four billion, which is really

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really really quite dangerous for an important
heavy nation like Nigerian. So again flag

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there one of our interest rates measured
about the monetary policy rate a year ago

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to a sixteen point five to this
about eighteen point seventy five. So it's

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gonna, of course it's gonna because
the central bank has got to fight inflation

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by increasing interest rates. But what
that does mean, sorry, but it's

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the SME is smaller. In those
gain enterprises will then struggle to get cheap

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funds. At eighteen point seven to
five, you will you will you would

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borrow at anywhere in double digit twenty
two, twenty three, making it's extremely

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difficult for the small skill and the
priceses to borrow. I mean, credit

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to the practice sector is up.
It's up from forty one trillion last year

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December to fifty eight trillion this year, so it's up, but the cost

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of that credits is now up.
And hence, if you then look at

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the Purchasing Manager's Index last year fifty
three now forty eight, the PMI is

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telling you or it's just an index
of how the purchasing managers what level of

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confidence do they have in the economy. So if they are buying most of

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they have a higher level of confidence. But the numbers at forty eight,

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you seems the confidence of the purchasing
managers, the manufacturing producing managers, it's

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not as high as it was last
year. I mean, if you look

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across the board, what's the world
the area you could say, okay,

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let's point to and we're doing pretty
good. You could see in Nigerian stockaging

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capitalization right last year about only seven
trillion. This year about forty trillion.

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Niger is top ten in terms of
cattle market capitalization. So that's a big,

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big, big positive. But then
you want to ask yourself how much

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that is driven by organic growth or
how much is that you're driven by the

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devaluation the Nira with then bring means
that a dollar coming in can buy more,

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but still positive. It's one slaver
of good news that we have.

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Then, of course, the last
in this is a just point up and

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it's I would say the most important
right is a crude oil production numbers.

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Last year we're about one point one
nine. Now we're about one point two,

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five million buyers per day. Significance
increase, but still nowhere near the

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two point two two point three numbers
of the NAGER was posting in twousand and

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five and all that. This is
very very important because without crude oil being

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exported to generate foreign reserves nijas for
reserves cannot rise. Our ability to should

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we say, lower the interest rate
to should we say, fund the imports

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to begin to affect the exchange rate
becomes very very limited. The Nigerian economy

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if it's facing two serious headwinds,
you know, and number one is lack

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of for x into the central bank
because crude oil production is down, and

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number two is full inflation, and
this too sticky, very sticky. Change

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that whole. Now the economy have
to be broken before the budget can then

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start to see or have a positive
effect in the economy. If we're able

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to break this to IgE low supply
of dollars and high inflation, it becomes

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a drag on the economy as a
whole. It restricts the the effectiveness of

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the treellions that are going to be
spent by the administration to grow their economy.

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So these two things have got to
be prior to number one. I

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think the point here is that there's
a lot of work ahead of this administration.

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They don't have the time. They
really have to hit the ground running

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and start to reverse and post better
macroeconomic numbers which then attract foreign direct and

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for powerfulio investments which hopeless you create
jobs, boost consumption and then start the

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process in that you're fixing the economy
that has really been on the back burner

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for a few years. All right, folks, that's our show. Thanks

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so much for listening again. My
name is Calu Lager. I hope you

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guys would pull the podcast. Let's
Talk Us the way I see it,

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available on all podcast channels. Do
have a good day and by