CBN Inflation Targeting, Nigeria’s Debt Status +More | Business Morning

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[00:00:05][music] [music] Good morning everyone. It's a brand new week. Time to do business. We have five days to do that. And each of those days we have 55 minutes to do current and relevant business talks. I'm Injan Mua.

[00:00:32]This is business morning and we're starting off from what's going on in the global oil space where prices jumped after Israeli Prime Minister Benjamin Netanyahu warned that the conflict with Iran was not over raising fears that tensions in that Middle East could escalate again and further threaten energy supplies. US pres energy supplies. Well, US President Donald Trump has rejected Iran's counter offer to end the war with the US and uh Israel and um they say if it's from it's a so-called representatives from Iran and they do not like it and it's totally unacceptable. That's the view of the United States. So, uh, what all that has done to the price of oil this morning is, um, we see Brent still above $100 while WTI is nearing, um, $100.

[00:01:33]So, of course, we see that uh the latest analysts are saying that the latest oil report that prices could rise further if Iran and US do not agree on a deal, adding that crude market have been cushioned by high inventory, strategic petroleum reserve releases, weaker demand in developing economies, and intermittent signs of possible deescalation.

[00:02:00]And then they're also maintaining that analysts are maintaining that risk to oil prices remain tilted to the upside as Iran retains significant control over the timing and terms of any potential agreement to reopen the critical strait of Homus.

[00:02:19]And then from there we see how the market fared in Nigeria last week. It closed positive 0.71% in the green uh sometime during the week. Last week we did see a huge drop um from the market. Uh I believe the market lost about 3% or so but eventually at the close of trade um we closed positive 0.71% and um we regained about uh more than 3 trillion naira which was lost um in one of those uh trading sessions. Equity closed at 157.09 09 trillion naira. For the sectors, everyone except oil and gas closed in the positive. Oil and gas lost more than 3% uh in the course of the week, 3.27%.

[00:03:10]Uh insurance was up more than 4%, industrial goods, dangote cement, you know, like um two days in the week was the market mover. uh one day it took the market down, the next day it recovered wholly and brought a whole lot of profit to the market. Uh that's for industrial goods and consumer goods also closed positive 1.81% while banking um also closed about the same thing. Top gainers last week, CAPLC, Ziki, Ziki Agro PLC, very interesting um stock at this time. We've seen consumer interest on Ziki's um you know really very catchy there. FTN Coco also had uh some positive movement last week. Top losers had Nigerian aviation handling Guinness Nigeria plc and Access Access Holdings. Um of course last week we remember that uh the lack of dividend payment uh and analysts said investors were protesting uh that lack of uh dividend payment. But we saw a bit of recovery towards the end of the week.

[00:04:18]However, in the whole um for the week, Access lost 2.59% of its share price. And um also the guideline of the CBN that they have to lose some of their foreign assets. We know they did they did a lot of acquisition last year. Um so I guess when you measure it for profits and sustainance, um they have to lose some of that. So all of that did contribute to the sentiment of investors around access holdings last week. However, um by Friday, we had seen uh a little bit of cherry picking on it and we'll see where that goes this week. Guinness well did saw a lot of uh profit taking from it last week. So at the end of the day, top trades for last week had Access Holdings, VFD Group plc and CW plc. CW WGPLC uh they were the top trades at the close of trade.

[00:05:21]Now, according to a report by the Nigeria Economic Summit Group, the NESG um on Nigeria's debt profile, a decrease in the 2024 debt burden index to 70.1 70 9 um in 2023 suggests a stabilization driven by moderated debt service pressures rather than improved fiscal capacity. simultaneously. Well, public debts to GDP rose 40.6% indicating that structural revenue weaknesses and reliance on borrowing maintain significant underlying fiscal vulnerability as the economy moves towards 2025. this observation of the NESG on Nigeria's death status [snorts] and the central bank of Nigeria has identified coordinated fiscal discipline at the subnational level as a critical pillar for its new inflation targeting framework. The Apex Bank argues that while it controls monetary tools, the fiscal actions of state governments such as borrowing, wage policies, and capital spending directly shape aggregate demand and can either reinforce or undermine price stability. Speaking during an engagement with subnational stakeholders facilitated through the Nigerian governor's forum secretariat, the deputy governor in charge of economic policy directorate at the central bank, Dr. Muhammad Sani Abdullahi describes the move towards inflation targeting as a shift to a more rulebased transparent and forward-looking monetary framework that demands close collaboration with state authorities. According to him, while the central bank retains responsibility for deploying monetary policy tools to control inflation, fiscal actions particularly at the subnational level, they play a significant role in shaping inflation outcomes within a federal system such as Nigeria. Dr. Abdullahi explains that inflation targeting is fundamentally about managing expectations warning that uncoordinated or expansionary fiscal actions by government state government that is could either reinforce or undermine monetary policy signals. He notes that the states influence inflation through multiple channels including borrowing decisions, domestic debt accumulation, expenditure patterns, wage bills, capital project execution, salary aras, overdrafts, contractor financing and weak coordination on the federation account allocation committee.

[00:08:17]That's fact uh receipts and um cash management. The deputy governor is also emphasizing the absence of fiscal dominance where government borrowing pressures compel the central bank to monetize deficit. That's a core prerequisite for successful inflation targeting. Let's understand it even more talking about inflation targeting and um what it means for subnationals for states. uh let's uh look at that at this time and we have joining us here in the studio Mr. David Adilo is a director Quus Economics uh right here in the studio. Mr. Dea, good morning. Welcome to the program.

[00:09:01]>> Good morning in how are you?

[00:09:03]>> Thank you. Welcome. So first of all, let's um for those of us who may not really understand what is this inflation targeting? We know that the CBN had said at the beginning of Mr. Kadoso's administration at the central bank he had said he's going to be working with inflation targeting what does that mean what are the implications of running with inflation targeting >> okay thank you so when we talk about inflation targeting what we're looking at is first we acknowledge that is impos it's nearly impossible to say inflation is going to be zero that's nearly impossible so when we talk about targeting we're looking at controlling inflation within a particular within a narrow band and to a low level. So one you want to keep inflation low as low as possible and second you want to maintain it within that band. Now when we also talk about inflation targeting there are two other things we need to note. One is the magnitude of the inflation level and secondly is the time horizons. So it could you may say in the next 12 months we don't want inflation to exceed this level over the next 20 over the subsequent 24 months we want to keep it at this level. It also has to do to be relative to the level of economic activity because sometimes you have to make a tradeoff between inflation and growth. To keep inflation at the at a zero level maybe to sacrifice growth and without growth we cannot have poverty reduction. Yeah. So inflation targeting is largely around making sure that you maintain the inflation number within a particular level that is acceptable that is healthy I mean accept acceptable given the goals of the monetary authorities. Yeah. So that's what we mean by inflation targeting.

[00:10:55]>> Okay. So um when the central bank now says that they need the cooperation of subnationals where do they come in talking about the subnationals >> the subnationals okay so first of all let me say the central bank has done something quite both commendable and instructive on the one hand we will say that monetary policy strategy should be the exclusive preserve of the of the central bank so it and decide to do it independently. But you also have to look at the context in which we operate. In most economies, the monetary authority which is the central bank will always work hand in hand with the fiscal authorities which is usually the executive and the legislature of a particular country. Now in this case they've also done something to say okay beyond collaboration between fiscal and monetary authorities at the federal level we have to go a step higher a step lower and say okay let's look at the subnationals as well now when we look at the numbers there's something that has happened that makes this critical as at 2023 subnationals in Nigeria at least based on data from about 32 states and local government plus FC city they accounted for about 44% of capex of the federation capex as at 2023. Now by 2025 that number had gone up to about 76%.

[00:12:29]Meaning that the federal government controlled less than 25% of federation capex. Now what this means is that the state governments have become very strategic and very significant force in looking at the entire fiscal realities of the country. Now gone are the days of 2016 when state governments will go cap in hand asking for bailouts. Today the state governments and others and local governments too have become the big spenders in the federation. In fact, what we saw in 2025 was that the states controlling almost 78% of capex places them as the most potent force in terms of spending and also compared to where the states were coming from their capex has about quadrupled. It's done about 3.9x compared to where they were in 2023. So they become very important in the economy. But it's also important that the states design their capex in such a way that they drive production not just consumption not just asset acquisition.

[00:13:42]So the structure of the spending at the state level matters >> is spending being directed to stimulate productive activities.

[00:13:50]>> Okay. So, so very interesting and I'm glad that you know you brought up some of those uh numbers how the capex and the spending power of states and local governments have changed you know over time even though sometimes when a lot of Nigerians are talking about you know the economy they look at the federal level >> forgetting that the states are actually controlling a whole lot >> they are they are quite powerful and in reality when we look at the growth of the economy when we talk about poverty levels The first place to look at is the states. People look at certain states and say, "Oh, it's a civil servant state. Must it remain so even if it was like that historically." What is the states doing or what are the states doing to drive productive investments?

[00:14:36]>> And I remember some time ago, President Tinui challenged the states. Yes.

[00:14:41]>> That he has empowered them enough especially with the removal of subsidy.

[00:14:45]Fact has increased um percentage sharing to to states and local governments have increased. So what are they doing? They have been empowered. So obviously the central bank has also measured this to say if we really want to target and manage inflation then state spending, state borrowings >> also contribute a whole lot to it.

[00:15:09]>> It does. In fact, when you look from what you've just mentioned, one, if the federal government, if the central bank rather as the monetary authorities decides to step back and let states do what they like and just non-inference, no guidance, what you will find is the central bank will have to rely on the instruments that are directly within its own control. Controlling money supply and controlling interest rates. In that sense, interest rate will go to a level where businesses cannot even afford in the name of the CBN is trying to control inflation. Now, that's part of what the government is trying to avoid to say, okay, beyond raising interest rates, beyond constraining supply of money through CR and other measures, can we talk to the spenders? Can we have an engagement? And you see, the truth is, it's not even so much about the level of spending. is about the quality and the structure of the spending >> of the spending. But let let me let me come come in there because I know you said that oh some states have been tagged civil servant states and then you asked the question must it remain that way? So >> I mean when we talk about the increased revenue for states and local government >> do you think that on the average Nigerians have felt felt that difference? Well, let me say that in principle it may be a bit difficult for Nigerians to feel the difference directly. And I will say this, I mentioned this to friends in conversation that if I'm not a if I'm not an employee of a state government, I'm not a contractor or a supplier to the state. The impact of the state's revenues through its expenditure program on me is going to be limited very >> but even do employees do they spend have they increased their salaries some states are still struggling to meet up with the new minimum wage >> struggling to even even with the increased revenue.

[00:17:15]>> Yes. Now the question is even if all the states meet up with the new minimum wage we also need to look at what is the production in the states if productivity is weak across the state. So let's use an example. A state that pays the minimum wage or even pays maybe 10 or 20,000 above the minimum wage but fails to attract transformative investments.

[00:17:40]How long will it last? What you're likely to have in that state is more money in circulation locally. But has production risen? And so long as production does not rise, inflation is going to be the result. So states have to structure their spending and also drive towards efficiency and productivity. What can the state produce? How is the state government investing in those things that the state can produce? There is this quiet issue of okay the bureaucracy around making invest real investments within a state how easy it is the approvals you need to get and other factors other factors or rules that are not even written on paper if it's difficult to invest in a state and you have a wellunded civil service or wellunded public service then we do have a problem so I'm saying that beyond the revenues going through the public wage bill. There's also the issue of productivity of the public sector. Is it doing its part and in two ways is it enhancing business and is it delivering highquality public service in health in education in infrastructure >> and in other social services >> and and I believe this all of this is um it's not a one fits all because different states have different potentials like I know there was a time states now we know them as maybe an industrial hub exactly you know they saw that there you know the demand for land investors want to come in and so they had this program where you could get CFO in in a couple of days and all of that.

[00:19:21]Now we've spoken to the governor of Nasarawa state a whole lot and he seems big in in you know bringing investment you know to their lithium >> solid minerals but we have other states which we hardly know what they are doing. Meanwhile, when you talk about especially um agricultural potential cocoa for instance in a state like cross river state on state you would expect that you know you would hear a lot of efforts and collaboration public private you know because these things are there >> the soil is there the weather is there all we need is the seed and then the efforts to groom it. Yeah, the natural advantage is there for most states in Nigeria and poverty levels will always be related to the level of local production.

[00:20:13]So if states so one when we talk about the poverty number attention goes to the federal government but few people stop to look at okay what's the role of the states because there is a relationship between poverty reduction and the level of economic production within a country and within a state and you why do most people come down to Lagos there's a lot of productive activity that goes on in Lagos now ironically So much of the productive activity in Lagos is in the services sector. Yes, we have a few industrial hubs and like you mentioned state has done a whole lot in promoting enterprise especially manufacturing large scale medium scale manufacturing state has done fantastically well and when we look at other states so there are states that have a clear advantage with processing.

[00:21:08]Now we talk about the rail system which makes transportation easier. We have a number of states with airports. We have those that have cargo airports. So there is infrastructure but we also need to make sure we connect that infrastructure to productive activity and where possible the state government can promote without operating productive investment. And I wonder how you think we can drive these other states which I mean when you go to certain for instance the level of ginger it just it just grows like massive behind and we know that I mean when you process ginger that's a huge export it's a huge value high value >> yes although although we do have the challenge of insecurity also but I mean if I'm sure if a state government is really determined >> these things can be overcome and then we can see these potentials becoming reality. But it doesn't seem like some states are just waiting for that fact >> fact. Ah well [laughter] fact will not solve the pro the poverty problem ironically.

[00:22:14]So the kaduna state that you mentioned in I remember in 2011 we were worked uh we were working as transaction advisors to acquire a ginger plant owned and built by Kaduna state government. in the 199 80s or 90s. Now state governments can either invest directly but we know the inefficiencies associated with public sector investing but they can promote or at the minimum facilitate investments in agricultural processing. That's the minimum that we can do because to the extent that we have a large number of our people engaged in agriculture. If states don't do their part, poverty is going to persist regardless of what the federal government does, regardless of the revenues that flow to the state governments. Because take for example if the spending of most state governments or some state governments for example goes to big-time contractors who make decent margins you and I can be sure that prop property prices in such states will soon go up rents will go up but what has been what would have been the benefits depending on the type of contract but we what we understand is unless growth in production happens and is inclusive poverty will persist. So the states and even the local governments have a huge role to play in driving up citizens welfare beyond the payroll. So in and as a private business person I will say payroll is one thing. What are you getting from the payroll? What's the productivity from the payroll? So state governments also have to begin to take that view that okay we are raising wages or we are paying above the minimum wage but in terms of results. So state governments have to manage for results and they including local governments too at the subnational level we must manage for results and and define our results clearly in terms of the goals of the state >> just like now state governments have been empowered to generate >> yes >> electricity >> exactly >> and we seem not I mean it's I think it's about 2 years now >> yes going to that >> states are still processing you know how their framework and all and I mean you can't just sit down and say oh national grid national grid when the law now allows you you can bring in investors you can um generate revenue uh generate electricity and also distribute and then investors will also be making their profits.

[00:24:46]>> Absolutely. So now infrastructure I mean electricity was had always been one aspect of infrastructure that people will say oh it's on the exclusive list but now we have states empowered to do certain things. So if states can build roads they can build airports and they can both regulate both generate and regulate electricity supply within their area. Do we still have an excuse? And like we say whether for foreign investors or private investors, Abuja is not going to give you land.

[00:25:18]>> Abuja is not going to give you the local permits that you need. It still boils down to a subnational government. The state and the local government.

[00:25:26]>> So states, no more excuses.

[00:25:28]>> No more excuses.

[00:25:28]>> An election is coming. I think Nigerians should actually really wake up >> and stop playing sentiment.

[00:25:34]>> Exactly.

[00:25:35]>> If we really really want to get out of this poverty, we need to absolutely >> shine our eyes. We need to we need to [laughter] and permit me to say this. When people say go get your PVC, it's not just about the presidential election.

[00:25:48]>> Yes.

[00:25:48]>> It also has to do with the subnational elections to see that are we getting the results at that level because at the end of the day the economic results when we talk about the macro is an aggregate of what goes on across the 36 states plus the FCT. It's an aggregate of what goes on across the 774 local governments. So really the subnationals don't have an excuse but I hope we are not in a situation where subnationals have more resources than the capacity to efficiently deploy those resources to the highest good.

[00:26:25]>> Wow. I hope we don't get to that level.

[00:26:27]>> Well I hope so [laughter] because now the federal government >> by all saying that the center is too fat. Well, >> and now if the center has shed some of those fats >> those well if we even say the central the center is too fat we can look at it from is it in terms of powers or in terms of resources and what we've seen in the past 2 years is much more resources have flown to the subs.

[00:26:51]>> Now in terms of powers there are powers that have already been devolved like the electricity sector that we talked about >> to the subnational government. So the question we should also be asking now is with what the subnational subnational governments have, >> what results are they delivering?

[00:27:11]>> All right. Thank you so much.

[00:27:12]>> You're welcome, >> Mr. David Ado, director at Quatus Economics. Thank you.

[00:27:16]>> Thank you. Have a wonderful day.

[00:27:18]>> And you too.

[00:27:20]And talking about the private sector, the Nigeria Employers Consultative Association, NECA, they've launched their guide for implementing the environmental, social, and governance standards. That's the ESG. And this one is for micro, small, and medium enterprises. It's a program that's aimed at helping firms to adopt sustainable and responsible business practices. The initiative which is developed in collaboration with the international labor organization also follows a free training session for the guide targeted at boosting compliance competitiveness and access to funding. According to the director general of NECA, Mr. Adi smart.

[00:28:02]The ESG implementation guide is expected to support Msmemes in aligning with global ESG standards while boosting access to finance and long-term business growth in Nigeria.

[00:28:18]>> This guide is designed to be practical, accessible and actionoriented. It provides MSME with clear guidelines on understanding ESG concepts in simple terms. implementing sustainable business practices, meeting emerging reporting expectations, identifying relevant ESG risks and opportunities, and positioning their businesses for improved access to finance and market opportunities.

[00:28:47]Beyond compliance, the guide underscores a critical message. ESG is not just about meeting requirements. It is about unlocking value.

[00:28:59]Businesses that integrate ESD into their operations are better positioned to attract investment and financing and compete effectively in both local and international markets. For Nigeria, supporting MSME to adopt ESD practices is also central to achieving inclusive growth, job creation, sustainable national development amongst many others.

[00:29:27]>> All right, let's take a break now. When we come back, we look at e-commerce. Um the market is is blooming in Nigeria and in Africa generally. We look at the details of that and perhaps some other opportunities we may be missing. It's now worth about 10.49 billion.

[00:29:45]That's the size of the e-commerce market in Nigeria. We'll talk about that after the break. Please stay with us.

[00:29:54]>> [music] [music] [bell] [music] >> You're welcome back. Still watching Business Morning right here on Channels Television. Let's talk about e-commerce, the e-commerce industry in Nigeria. And as at this time it's been estimated to value at um 10.49 billion dollars over 82% of all online orders are placed via smartphones uh due to inflationary pressures. the secondhand market. Yes, the secondhand market has also seen um a massive surge and then the businessto business sector is shifting away from pure rapid expansion towards backward integration and then also while cash on delivery is still present buy now pay later solutions and digital wallets they are also growing rapidly. Companies are integrating machine learning and micro fulfillment hubs to tackle urban congestion and high last mile costs.

[00:31:11]Inconsistent power and high delivery cost however is contributing negatively to that inflation up by 30% due to the traffic and addressing those um challenges there. AIdriven fishing talking about cyber security that's also a threat. So as we roast on the positive side, we also have the threats coming from the negative side. Let's discuss this with Ola Oayo, the co-founder and chief executive officer of Veto. Um thank you so much for joining us on the program Mr. and welcome.

[00:31:47]>> Thanks for having me. So this projection of uh hitting about $30 billion this year, how much more economic value could exporters unlock and where is this 13 billion $30 billion? Where would it be coming from?

[00:32:06]>> Yeah, sure. Um the headline number of uh the quantum of e-commerce uh in Nigeria hitting $30 billion this year is impressive but I think it actually states um what's possible. Uh right now a meaningful share of our exports uh from a crossber perspective is actually leaking through three uh significant I'll call them drains. The first is high remittance costs. uh it cost about 8% on the average to to remmit in and out of Nigeria. Uh we also have a lot of FX conversion losses and settlement cycles that can tie up working capital for up to 3 to 5 days. If we simply matched if Nigeria as a country simply matched the global average on crossber payment costs and we can cut settlement times to same day we actually estimate that exporters could retain between 2 to 4% more of every transaction. So if we're looking for growth for up to $30 billion this year we could you know comfortably say that somewhere in the order of 600 million to $600 million to 1.2 2 billion in additional value is actually staying inside Nigerian businesses every single year. And this can be unlocked by us um having faster settlement times, reducing the amount of time cost that it takes us to remmit funds and then also um removing the issues we have with FX volatility. So that's a significant number that can go into everyone's bottom line that is in the e-commerce space in Nigeria. H so these things you've talked about faster remittance line and all of that point towards infrastructure the financial infrastructure and we know the infrastructural gap in Nigeria in Africa is really huge. Um are there ways perhaps there could be incentives you know to close some of those gaps which would at the end of the day lead to this good bottom line for everybody which you referred to.

[00:34:12]>> Yeah absolutely. So I I think this is very important uh because this is where policy comes in uh to help boost economic growth uh for an FME in ABBA uh if you're shipping leather goods to Europe or if you're a vendor in Lagos that you might be selling your goods on on a foreign e-commerce platform. The ideal infrastructure has four distinct properties.

[00:34:37]Number one is multicurrency collections at source. Right? You want to have the ability to receive your money in hard currency. So whether it's US dollars, pounds or euros and you can convert to local currencies without losing, you know, right now the 2 to 3% conversion cost that you lose before the money lands. Number two, same day settlement.

[00:34:59]uh so your working capital as an SMA is is not trapped within correspondent banks which is what happens right now with with exporters for you know sometimes a week sometimes up to two weeks. Uh number three uh you need transparent competitive FX pricing very close to the interbank interbank rate and not bundled with you know various sort of costs associated with it that quietly cost our exporters currently between 5 to 10% per dollar and number four the fourth uh sort of infrastructural change we we would love to see to ensure that the value for e-commerce crossber gets to the Nigerian theme is localized is anti-moneyaundering and KYC documentation and verification that's automated and not manual and this reduces the key structural barriers forme export so right now a lot of the documentation you need to file if you're an exporter in Nigeria is extremely manual if we can automate this and and remove that layer it actually helps simplify uh money movement for for e-commerce cross border which is very beneficial and it's it's a key infrastructural change that would help drive growth. H so data shows that um uh about 90% or so of transactions have been done from smartphones and then you know here in Nigeria we always talk about financial inclusion um you know capturing the informal sector uh how much could you say or would you say we are losing or missing out when we talk when we talk about small businesses you're talking of those at the lower cater leader of the economy or of business transactions and we need to capture the people you know if we really want to have more numbers which is advantage that Nigeria always talks about how much are we missing in not having them is there a way we can accelerate you know getting them into the fold >> yeah absolutely so um I don't have specific data to to quantify how much we're missing by you you know uh having a large swath of the population uh outside of the financial inclusion drag net or unbanked uh but what I can say is that there's been significant strides in the last 3 to four years in Nigeria in building out a seamless agency banking network um you know with lots of like agents with POS terminals uh and then also uh real time uh bank transfers so I would say that the the barrier to entry for someone that is outside of the financial drag net to actually start um you know using e-commerce to to kind of uh buy and sell goods is much lower now than it was 3 to four years ago and we expect that to continue lowering um and that's you know given the size of the population in Nigeria that is just a significant boost that we would expect to see. So, we have very very high smartphone penetration, but e-commerce is still a low part of what people use their phones to do. Uh, we're getting people, you know, to be more um comfortable with using sort of agency banking such as POS uh terminals with agents. And the next step is for them to actually start transacting either through those um agents or using their their smartphones. you already have things like, you know, uh QR codes that you can use to to buy goods and and easy sort of text banking. And the more of those sort of innovations we see, the better it is. Fundamentally, our financial rails, um the Nigeria interbank settlement scheme is realtime payments across banks in Nigeria really supports convenient e-commerce. So we already have the the key backbone which is can you make bank transfers as easy as as possible and and the rest is just to get to the next layer which is trust and getting more people to use agency banking if they would like to do uh e-commerce transactions >> and um the other challenge you noted is with the FX uh uh in the last I mean I think since last year or so we've had a level of stability or is this still a challenge talking about our FX X.

[00:39:25]>> Yeah. So, there's been a level of stability that's uh undeniable. Um, so I think it's very important that we uh praise the current uh administration for the great work they've done in uh you know, structurally reforming the the Nigerian foreign exchange sector. That's led to a relative range, right? But having said that as an exporter um you actually uh right now you you can have your goods exported but you need to bring them bring the funds back into country within 6 months right so there's a timing issue with that right so anytime even though the the FX rate is is relatively stable there is at least a 2 to 3% fluctuation or there's been in the last six to eight months so you can end up you know selling goods abroad and if you can't get it back uh you on time uh and say you get it back in three months time or four months time you actually can lose value because the ex the exchange rates will be different at that time. So being very cognizant of that actually so FX is still a significant uh proportion for this. The other thing I would state is that, you know, if you take a a Nigerian e-commerce export doing about a million dollars a month into the US uh for for exported goods, uh it could take about 3 to 5 days from the buyer's payments to actually get to them, right? So, let's say it's a very ideal scenario. The buyer pays them. That 3 to 5 days is is capital that you're locking in uh because you don't have real-time settlement for your funds. And between those 3 to 5 days, the effects even though it's relatively stable could still anything between one to two to 3% which makes you lose money. So that is still I think there's been a great reform in the last uh year or two but it's still fundamentally an issue that every exporter has to deal with. So FX volatility is still is still an issue.

[00:41:19]>> All right. Thank you so much for bringing that up because I mean a lot of us thought with the relative stability we have in the rates that you know everything has been taken care of but thank you so much and we'll certainly push that conversation forward Mr. Yet your co-founder and chief executive officer of Verto.

[00:41:38]>> Thanks for having me in.

[00:41:41]>> All right. Now let's head to the global space with an edit.

[00:41:46][music] All right. So, we do apologize for that technical glitch that we had there. Of course, computers always have a way of messing you up when you're doing the right thing. Okay. So, now let's start with the second week of uh May. Uh we're starting first with um what uh what to expect this week. And we first of all we're starting with um Monday where we see that um the the China's um April inflation report is out and it shows that the the the figure was up by about 0 2.3%. Uh so it's it's not it's not look looking too too good for the China's produc producer price index there. And for Tuesday, we're expecting that US inflation, that's both the consumer price index as well as the producer price index will be released.

[00:42:58]Uh so that's for Tuesday and Wednesday.

[00:43:00]For Wednesday, we see that um the ECB president as Christine Lagard will be having a meeting later uh on on on Wednesday. So that's uh where she'll be giving an economic outlook on the European European zone economy as well as um uh the the outlook for uh interest rate hikes where whether there will be interest rate hikes or not for the uh for the Euro zone economy and on Thursday what we go we'll be expecting that this is all eyes out for the Trump uh Trump US President Donald Trump and Chinese President Xi Jinping holding their meeting. Uh first of all, Trump will be going there on Wednesday, but the meeting will begin on Thursday. So the the the leader leaders of the two of the world's two biggest economies will be meeting and they'll be slugging out lot lots of issues there from tech to autos and so many others as regards um uh as regards trade. And then on Friday we have uh the Japan's um producer price index report. We'll be talking about producer price index both from the US uh China as well as now Japan one of the world's biggest economies there. So we'll be releasing their uh their data.

[00:44:07]So the previous March uh uh the previous data for March they show that um uh it was an increase of 2.6%. So now we'll be expecting that it grew by about uh some uh by by just about just just a margin of about 0.8%. So that's the expectation for the market. So from there let's move over to what's happening around the world now. First of all, we have US President Donald Trump rejecting what you might call Iran proposes, US opposes. So the back and forth in between the two countries uh ever since the war started on February the 28th. So just yesterday we saw that US President Donald Trump is rejecting the new offer which is quite a a number. He says it's not it's totally unacceptable. So as a as a as a response for that um uh at the same time Israel's prime minister Benjamin Netanyahu says the war will continue. Uh so it's not not putting any clear definition on whether this war will stop or in in the midst of a ceasefire which is still continuing there. And at the same time Iran says that they would not be in they will not bow down to the enemies signaling that a diplomatic breakthrough may still be a long way despite the mounting economic pressure on both sides. So from there let's move over to uh for the markets we talk about Iran for we talk about Europe and Asia markets they were in the mix but um South Korea's Cosby index which last week we talked about it hitting a new high of about um uh about 7,000 but now it's on almost on a threshold of the 8,000 index level largely driven by tech stocks such as SKH Heinix. So that led most of the markets around the Asian Asian Asian region while for US um US stock futures they're in the green uh pointing pointing up ahead of Monday's opening session by 2:30 Nigerian time.

[00:45:57]So from there we move over to the that's for for the for the UK's um uh um UK's economy. What we see is that um the government borrowing borrowing cost is rising uh as pressure mounts on prime minister K star to step down. There are calls for him to step down just uh before within this week. So we will be at the moment at today he will be giving some speech about the UK's economy and at the same time about uh some about 135,000 jobs are under risk within the UK economy. So most likely that will have an impact on the market as we speak. So from there we move over to uh the other parts of of the world here um where we have that many sorry I think we do have a little bit of um technical uh glitch there. But that's it for the global markets uh for Monday.

[00:47:05]>> [music] >> Heat. Heat.

[00:47:13][music] [music] Heat. Heat. [music] [music] [music] >> [music] >> Heat. Heat.

[00:48:07][music] Heat.

[00:48:15][music] [music] Heat.

[00:48:26][music] [music] >> [music] [music] [music] >> All right, you're welcome back. And as we head out of the studio, take you to the markets for early trade here in Nigeria. Nigeria's local boss. We see that the all share index is in the positive this morning. It's gained more than 1% 1.26%.

[00:49:16]Uh that's more than 3,000 basis points and uh it's at 247,869.52 this morning. Remember we talked about access holdings uh which saw a lot of negative but I mean a bit of recovery towards the end of the week but investors are building on that positive sentiment this morning it's 4.66% up at this time talking about access also follows suit 6.67 67 uh Lasco FTN Koko uh top trade last week is still continuing in fact is at 10% this morning talking about FTN Koko and top gainers Chams Chams has recovered also AEL is still on that recovery path as well as Sky Shelter Fund top losers this morning Premier Paints GU is still down Prestige and Total Nigeria those are the top losers at this time lad Williams will be here at 1:30 and he will have fresh numbers for intraday at that time.

[00:50:20]I'm in John Mqua wishing you the best of the rest of the day. Bye-bye.

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