Economic Strain Overshadows Sallah Preparations Nationwide - Alaje

Added: 2026-05-28

[00:00:00]Now to provide an economic review of the current surge in food prices and analyze the latest GDP figures released by the National Bureau of Statistics uh with emphasis on inflationary pressures and of course house household spending and welfare. We're joined by Paul Alaj an economist and the man with that library behind him. I was just curious to ask if he has read all those books we saw behind him and he said yes.

[00:00:25]>> Well done. So you are in the best position to break it down beyond the figures of the NBS. The NBS saying that you know um the GDP grew but dropped below what we had previously which is now 3.9 something%. I want us to break it down tonight. When President Balatinubu says his tough reforms are beginning to yield results of a stable economy and then our correspondent goes to the market and sees that there are a lot of rams but not a lot of people are buying because they can't buy.

[00:00:56]>> Where is that stable economy? What's the difference in what the government is saying and what we seeing on the ground?

[00:01:02]Why is that you know that disparity?

[00:01:05]>> Yeah, thank you so very much. Uh I will start first with um the current inflation numbers. uh the bureau of statistics have released inflation number the month inflation number for March was above 4% the one for April was above 2%. What NBS is telling us is that on month alone very short period of time inflation is raising when people saw that inflation went to six I mean 15.69% 69% there about what NBS is saying that when you compare average price this year when you compare with last year it increased >> again when we talk about uh GDP growth rate GDP grew but as a slower rate not that we had a recession we had a lower GDP number so it's not negative >> now ordinarily because prices are increasing >> the GDP measure total monetary value the exchange hand you know over a period of time you know the total money value of goods and services what you bought over a period of time prices are increased so it will reflect in your GDP numbers but we would have would the number would have been much higher than that if inflation were to be lower because to get the real GDP you have to divide the uh the nominal GDP by inflation as inflation increases it mean the denominator is higher when the nominator is higher your end result will of course be lower so this is why we have reduced GDP and that is why it's important for us to know that inflation matters And how we tackle it also matters from the report which of course corroborated what the numbers we have picked on the street to move a good a trailer uh load of good say from um Cano to Abuja of this time last year it was 900 today the price is between 1,300 to 1,500 why because of global economic pressures because of external shocks because of negative externalities Nigeria is not at war with any country but the countries are at for the matter over 10 to 15% of global commodity pass through the straight of our moons. So whe until we resolve that and there's confidence. So that of course will bring future expectation in rising price. So the president is saying oh yeah we have to a large extent been able to bring economic stability. What does that mean to us in economics? It does not mean everything is stable. It doesn't mean everything is not stable. We look more at the parameter. The first parameter is inflation. Is inflation stable? Can we say that now inflation this rate it should be for Nigeria it should be single digit and that single digit is 6 to9%. Now for rebase inflation you should be looking at more lower figure which is between 3 to 6%. Nigeria according to the broad statistics not my figure is 15.69%.

[00:03:44]Compared to where we were before we we based inflation I think near 40% if not up to 40%. Then you look at unemployment we are using 1 hour a week not 40 hours a week. Your work suggests that you work for 8 hours in a day and that you multiply that by five is 40 hours. But to follow what ILO and other international organization have said and so so that be globally compliance for most part of the world what they using now is 1 hour a week. Nigeria also joined and that crash unemployment for what we were using before which was 20 hours a week to 1 hour a week. at 20 hours a week we had as high as 33% of the labor force today what we have is around 4%. Now what is the parameter standard of gauge is what we should be looking at what is the minimum requirement it should be 2 to 3%.

[00:04:32]Nigeria is more than double of what it should be. So when economist says that unemployment is 4% you ask what should it be?

[00:04:40]>> For instance when you say that Nigeria debt to GDP is okay. No you say okay I hear you but what should it be? Debt service to revenue is okay you say what should it be?

[00:04:48]>> So what we look at is this is where we are but where should we be >> you know as as an economy. So then when you look at our GDP, the president make major commitment when he was coming to office that this economy >> and also at the central bank governor, the government is doing everything possible to make Nigeria a trillion dollar economy. That is huge. That is desirable. That is what all Nigerians should look forward to. But for us to get there, can we get there with 3% and 4% GDP growth rate?

[00:05:16]>> If you let me come here, you know what?

[00:05:19]I would actually like 17% GDP growth rate. And we need to do that for about seven to 10 years. We're not doing 10, we're not doing eight, we're not doing six, we're doing three to 5%. Which means we need to do more. We need to inorate this economy. Something about the method we are using now which is not bad. You know economy have different shapes have different school of thought.

[00:05:41]We are practicing a market system. For market system what you need the most is capital. M >> so cost of capital with the banks they must cooperate with central bank and indeed the federal government. Now when they corporate people will have access to credits and you remember president you know that the president said what he's doing he already has his intention he said he talked to the bankers private sector in Lagos he said you don't have to use your money to buy a house what you need to do is to get credit >> right >> now do we have access to that credit major underlining factor why all the what government is doing seems not to be reflected until we get credit correct and people have access to capital when you have access to capital, you're going to see major growth that I want to see on this economy.

[00:06:25]>> Excellent. Now, in looking at this further, you realize that the non-oil sector actually contributed about 96.08% to the real GDP um growth and the oil sector barely 3 something%. Please help us understand why and what does it mean in terms of where our real focus should be. Now the lopsidedness has been like this for as long as I can remember. For as long as I practicing as an economist and that's over two decades now >> I tell you >> the oil sector what is contribute to GDP that's how our economy participates.

[00:07:03]>> So what is not in oil is account we can account for over 90%.

[00:07:08]>> Oil is contributing less to the GDP. But how does that matter? It matters because what is giving us FX? Our FS come from oil.

[00:07:19]>> What is giving us major revenue? Revenue comes from oil. But what is contributing is less. And people will say, "Oh, FS is not doing." They have because the contribution to the GDP is this.

[00:07:30]Unfortunately, what gives us revenue is not.

[00:07:33]>> So you see the lopsidedness and that is why this will not change until we stop focusing only on federal government. We have to focus on local government. You see Nigeria will be a great country. The moment we know that our economic miracle lies at the grassroots. That's where the real people are. We need to change the focus. Our local government will also have transparent books to see what surplus do they have to see how many people get engaged. Where is production happening? If this is not happening, I tell you it work. But local government will not function. Even say we not function well. If the fundamentals for development and growth, they are not there. Number one is energy.

[00:08:09]>> If you don't have energy, I will not be on this show talking this evening. For those watching me now in their respective homes on YouTube, anywhere you are watching us from, if there is no energy in your mind, in your body, you can't watch. So an economy that lacks energy honestly cannot do much. So you look at our energy and that can be divided into two. What is happening to cost of fuel? What is happening to cost of energy even the availability as a nation? We don't need anything less than 50,000 megawatt. But do we have up to 10% of that? That is one. Two security.

[00:08:38]A country that is not secure honestly is going to have major impact. I'm not saying that the entire Nigeria should become secure overnight but I am saying that we need to secure and the news about insecurity in Nigeria is already affecting investment. Thankfully we have a president that said he's been going around to bring investment to Nigeria.

[00:08:54]Positive news mentioned for us all over the world but we now need to come to work with that with some inumer challenge. There about 12 of major pillars that we make local government to function. One of them before I go on very quick is what we're about to do next year which is election. It must be transparent. It must be seen from primaries. There must be internal democracy. When all of this happen then there will be confidence in investors not just foreign investors. Even Nigeria to say our country is going back to the path of growth. But remember the most important is local government.

[00:09:24]>> Okay. Well, NISA Institute of Social Economic Research says uh it actually predicts 5.02 02 uh% GDP growth and singledigit inflation by 2028. I wonder if you're that optim optimistic and what should be the basis of that. We have to say thank you very much. We're being played out. Thank you Paula.