2024 budget: Minister explains why FG settled for N800 per dollar benchmark
The Nigerian federal government says it was conscious and strategic never to base the foreign exchange benchmark in the N28.7 trillion 2024 budget on a spot rate to avoid eventualities and uncertainties.
Atiku Bagudu, the Minister of Budget and National Planning, made this known while speaking to State House correspondents on Thursday.
He explained that before arriving at the projected exchange rate of N750 to the dollar in the 2024 budget, which the National Assembly raised to N800 to the dollar, the government considered and critically viewed the average performance of the Naira.
“For budgeting purposes, you don’t use the spot rate for anything. Oil prices can go to 120 today; there may be a shortage or a collision between two ships that will block a channel.
“It would be foolish to use that as a reference price. I should take a period of maybe six months to one year and say, let me observe this average behaviour, so you don’t use spot prices,” the minister noted.
He stressed that “much as we are hoping that it will soon come below, at the time you are doing the budget, you will take a view on average performance. And that’s what we took.
“We took an average performance of 750 on the executive side, and we proposed it to the National Assembly and the National Assembly in its wisdom, and mind you, this is a democracy, and President Tinubu is a lifelong advocate of institutional separation of power.”
Bagudu noted that the Federal Government was confident that, with the measures it is currently taking, there will soon be significant upsurge in the supply of foreign exchange into the economy.
The Budget minister who also spoke on the level of borrowing to fund the deficit in the 2024 budget, said that the difference between this year’s borrowing amount compared to 2023 remained significant.
Recall that President Bola Tinubu signed the N28.7 trillion 2024 budget into law on January 1, 2024.
Since June 14 last year, when the Central Bank of Nigeria floated the Naira at the forex market, the currency has been fluctuating.
