$1 Trillion Economy In 2030 Is Not Going To Happen - Rewane

Added: 2026-05-27

[00:00:00]So, it's um the holiday, the Sallah Day, Eid ul-Kabir uh celebration. That's what's in in the air. We have our If you watched our sister program, Morning Brief earlier, you would see Kelly G guys in the market with with the rams. And we hope to have him on the program here in Business Morning to give us updates of what's happening there. So, uh of course there are prices of ram, but there's also the traffic that stops uh those who want to go to work right from their homes or coming to Lagos. It's on both sides of the road.

[00:00:33]Though I must say from my observation, not as worse as it was uh yesterday.

[00:00:38]It's much a bit lighter today, but Kelly will join us to tell us what's happening on ground. Right before then, we're going to speak to the chief executive officer of Financial Derivatives Company, Mr. Bismarck Rewane. Um they did some findings also on what's happening with the prices of ram and cow. We heard it searched sometimes the above 50% Mr. Rewane. Well, I don't know if I have to eat ram at this time. I can wait. I don't have to pay that extra 50%. I can wait until all of this is over. I hope by then that the price would have reduced at least a bit. Good morning, Mr. Rewane. Good morning.

[00:01:19]Thank you very much for having me this today. Good to have you.

[00:01:22]>> you're right that uh the price of rams and cows, you know, beef uh up generally over 47 to 50%.

[00:01:30]What is strange is the the fact that a big ram is going for about 1.5 million, while a small cow is going for about the same price. But we've seen the big cows go as high as 3 million. So, apparently, the sensitive prices to the elasticity of beef is quite high.

[00:01:49]I don't know whether it's because of the ram because the the Sallah, which is going to happen Wednesday and Thursday.

[00:01:54]But after that, what will happen? There is definitely a cost of transportation.

[00:01:59]There's also a, you know, the fact that the substitutes are not that readily available. Therefore, we begin to see that so there's seasonality, there's a festival period, and then also there's a shortage of protein generally speaking. And therefore Therefore, we should brace ourselves up for a general increase in prices. And if you look at the slides that are there, you'll find that the price of um rice has gone up by about 80% in the last 1 week to 65,000 to 60,000.

[00:02:31]And the price of a bag of garri has gone up by as much as 5% to 19,000.

[00:02:35]And tomatoes up by 87% to 150,000.

[00:02:41]150,000 a basket of tomatoes up 87%. Onions up as well to 80,000.

[00:02:49]Vegetable oil stayed flat at 17,000.

[00:02:52]And a bag of pepper stayed flat at 120,000. So, I saw your program yesterday of the cost of a healthy diet is 1,500.

[00:03:02]I don't know what you can buy with 1,500. If you If you had to buy 1,500 as for a healthy meal, I'm sure everybody will be unhealthy in this country.

[00:03:10]1,500 cannot buy anything.

[00:03:14]That's the truth.

[00:03:16]Well, Mr. Wani, you know, in spite of this hike in prices, um if you have to do anything on the Lagos-Ibadan Expressway now, I mean, you certainly have to consciously tell yourself to be extra patient because of the crowd. I mean, like half of the road on Kara Bridge and around has been taken over by trucks, cows, rams, and those who are buying, and all of that. So, I mean, I was just thinking, prices are higher, but people still have money to buy, or else, what are people doing? What's causing the traffic? So, I don't know, but we have some kind of immunity.

[00:03:56]>> It was Kennedy who said, "You have nothing to fear but fear itself."

[00:03:59]Inflation expectations are that prices will go high. So, a lot of people are buying now.

[00:04:04]Right? So, that they can actually hedge against that increase in price, but I think those fears are mainly unfounded.

[00:04:11]Because the truth is that in economics, we have what we call the budget constraint. You only have so much money, and when the money is finished, you can't buy anymore.

[00:04:18]You Maybe you can borrow a little bit.

[00:04:20]But, the reality is that if you bought it now, the next cow, I don't know what you're going to do if you because you're not only buying the cow or the ram, the beef, you have to buy all the other ingredients to make whatever it is. Or, it is possible that there's a hidden income. A lot of people are when they tell you that they have no money, they really have money. If not, how would you buy this kind of cow for 3 million?

[00:04:43]And many of them are actually uh giving it out as gifts. It's part of the inducement factor. This is political season, so maybe part of the people you see in the primaries have been given uh sort of beef and cow and rams and all of that to induce voters.

[00:05:00]>> Okay, okay, Mr. Ruwani, just just hold on a bit. I learned we have Kelly standing by now. I'll let him tell us the situation on ground, and then we can have you react to it. Kelly, can you hear me?

[00:05:15]Hello, Kelly?

[00:05:20]Take one now.

[00:05:22]Kelly, can you hear me?

[00:05:28]I think we're having a bit of a technical hitch right there. I hope we can have Kelly. Sorry about that, Mr. Ruwani. So, Kelly's is with the rams and the cows. So, we want him to tell us, you know, but if you conclude your thought, please.

[00:05:42]What I'm saying is that, you know, this is political season. This is spending season. This is salary season. So who knows how much of the price increase that we are seeing today as a lot of inducements and things to motivate voters to stand behind their candidates.

[00:05:59]That would be interesting but I didn't see people standing behind their candidates with cows but maybe the cows were in hiding and then people >> [laughter] >> and now did that and after that you after you after voting you got your your ram or your cow and then took it take it from there. But it's interesting time but I think one of the things we need to talk about in Nigeria today is the GDP numbers that came out.

[00:06:21]And the GDP numbers came out at about 3.89.

[00:06:25]While compared to Q4, there is a there is a slowdown but I think we need to take one something into context. One is that at 3.89 Nigeria's GDP growth rate is higher again than the population growth rate which means that technically speaking Nigerians will be better off. Your income per head should be increasing. One.

[00:06:49]Two, it also looks at when you look at it uh as population growth rate Nigeria's growth rate is higher but also technically and you know if you look at growth over the period uh Q4 is always a period in which you have the highest growth rate. So in Q4 we had 4.02% growth and now it has come down to 3.89.

[00:07:13]Why does that happen?

[00:07:15]Q Q4 is Christmas and all the other things and so there's a lot of spending and Q1 is when after spending in Christmas and New Year people now slow down on their growth and have no income.

[00:07:26]People are paying school fees. So that is a traditional and if you see that from the data that we've seen the highest Q1 um growth rate before this one this quarter was 3.13. As a matter of fact And last year it went as low as 2.31, 2.27, 3.13 and this year is 3.89.

[00:07:47]So, if the fact that it has declined compared to Q4 but it it is infinitely higher than what it was in Q1 last year. Very, very important.

[00:07:56]Secondly, what is the aspiration of Nigeria? The aspiration of Nigeria as the president has said it is that we will we should have the $1 trillion economy by 2030.

[00:08:06]That's not going to happen, but it's good to aspire, it's good to have the ambitions.

[00:08:10]Therefore, to achieve that growth rate or to achieve $1 trillion in the year 2030, you need to grow about 15% a year for the next 2-3 years.

[00:08:22]That's not going to happen. So, the World Bank's revised our growth projections to about 4% and I think that's compared to the past, that is quite interesting and uh impressive.

[00:08:35]So, what are we going to see uh when we now look at the various sectors that grew in This is impressive. The fastest growing sector this time around again was oil refining.

[00:08:45]77% growth rate. So, if the GDP is going at 4% and oil refineries are going at 77%, boy, that's a sector to be in and you All of us know why. One, the Dangote refinery is on fire, you know, it's on it's firing on all cylinders.

[00:09:01]Uh aviation fuel, diesel, PMS and and cooking gas.

[00:09:06]We also have the telcos. Telcos grew by 12.24%.

[00:09:12]That is phenomenal. That is the telcos are growing three times or four times the rate of growth of the economy.

[00:09:19]The refining, that is uh the Dangote refinery, is growing about 10 times faster than the economy itself.

[00:09:27]Crude petroleum, on the other hand, grew by only 2.46 cuz production was average around 1.4.

[00:09:34]Trade grew by 2.05 and that affects everybody. Everybody in Nigeria is a trader.

[00:09:38]Then water transportation, 4.20.

[00:09:41]But look at the areas that contracted. Air transport contracted minus 7.62.

[00:09:48]You were just announcing now that the some of the airlines who were suspended uh the Federal Aviation Authority No, NCAA is going to lift that no payload no flight.

[00:10:01]Because the transport sec- air transport contracted by minus 7.62. We also saw some >> [clears throat] >> contraction in road transportation as well.

[00:10:11]Crop production is still down. So, what are we saying here? We are saying that while the overall growth rate has expanded, it is restricted to certain sectors. Generally speaking, oil came down marginally production, but services actually grew.

[00:10:29]So, what what do what we are we should be looking at what happens in Q2. Q2 was when Iran uh the US the Iran conflict started. We are going to see some contraction in Q2, and we're going to be seeing uh a very tale of two cities that some sectors will do well, and then sectors will do bad. But we see also that insurance actually increased. Why would insurance be increasing in uh growth rate very rapidly?

[00:10:59]Because people now know that if you do not insure your assets, you will not your your and you will lose it due due to any number of actions, you may not be able to replace it. So, a lot of Nigerians are becoming very very aware and sensitive to uh insuring their assets. I think that is one of the key things that I wanted to bring to your attention this morning.

[00:11:21]All right.

[00:11:21]>> said it.

[00:11:23]Okay. Yeah, thank you so much, Mr. Iran, for bringing those to attention. The fact that even though we saw a a in the GDP quarter and quarter is because of normally in in the fourth quarter we see that extra activities around the festive season and and services still leading and of course the role that Dangote has done we saw S&P Global I don't know if you saw that story S&P Global yeah they did attribute the positive that we have. The economy was the S&P Global is saying look if there was no refinery then Nigeria would have been in chaos.

[00:12:04]Yeah now that there's a refinery is Nigeria optimally utilizing that refinery? The answer is yes.

[00:12:09]Now so what is going to happen that is for you and I as we go into this IPO season which is this uh in the next one or two months it's you can see that this is a win-win ticket both for Nigeria as a country for Dangote refinery and the fact that we are not queuing up to run things this way. Can you imagine what would have happened if there had been queues and and cows at the same time? I don't know what would have happened. I will all right. Well thank God we don't have that situation Mr. Bismarck Rewane chief executive officer of Financial Derivatives Company. Thank you so much for your time. Thank you very much for having me.