FCT, Abuja – Senate chief whip, Ali Ndume, has said the Bola Tinubu administration is not losing out from the naira depreciation against the dollar.
As reported by Daily Trust, Ndume stated that the apex government is rather gaining more revenue to fund its 2024 budget.
Ndume explained that the 2024 budget, which was presented by President Tinubu in November 2023, is a ‘dollarised’ budget — in terms of income.
The Borno-born politician and All Progressives Congress (APC) chieftain was a guest on Channels Television’s Politics Today programme on Wednesday night, February 21.
Ndume noted that as the value of the dollar increases, the Tinubu government would have more naira to spend on its expenditure, which is denominated in naira.
He added that Nigeria’s major product, crude oil, is still in high demand in the global market and that the country will benefit from the current dollar-to-naira exchange rate.
His words:
“Don’t forget that this budget is a ‘dollarised’ budget, especially in terms of the income. And when it comes to the terms of the expenditure, it is in naira.
“So if we are getting our money in dollars and the value of the dollar is up, that means we will have more naira in terms of what we spend.”
While Ndume appears not too bothered by the exchange rate and the Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, promising that inflation will moderate in 2024, many Nigerians do not think the nation’s economy has a positive outlook.
Below is Ndume’s full interview:
Oluwatosin Ogunjuyigbe, a business expert, said Senator Ndume’s assertion is not entirely accurate.
Citing the example of Eurobond, Ogunjuyigbe pointed out that there are also a lot of external debts that are denominated in foreign currencies.
He explained that because Nigeria relies on substantial external financing to run its economy, the dollar’s rise against the naira is “not a good one”.
“What he (Ndume) said, on paper, is accurate, in the sense that if you are indeed running a dollarised budget, then on paper, it means we have more naira to spend. That is for operating capital expenditure.
“However, the downside starts from her. First of all, we do not know for certain that most of their spending would be done in naira. There is a reason that they estimated their budget in dollars. It is very likely that a lot of their spendings are going to be done in dollars.
“For example, when they want to carry out some capital expenditure like building of roads, most of the time, they are going to spend dollars.”
He continued:
“If your money (Naira) loses value (when your debts are in foreign currency), it becomes harder for them to pay back.
“So, it’s not directly benefitting. In fact, I think the country would suffer more loss than it would gain.”
