The Minister of Budget and Economic Planning, Atiku Bagudu, says the decision to base the 2024 budget on foreign exchange benchmark of N800 to a dollar was a strategic and conscious decision by the federal government.
In an interview with journalists on Thursday in Abuja, Bagudu said budgets could not be based on a spot rate in order to avoid eventualities in the world market due to global dynamics.
He said before arriving at the projected exchange rate of N750 to the dollar in the 2024 budget, the government considered and viewed critically the average performance of the Naira.
The National Assembly eventually raised the foreign exchange benchmark to N800 to the dollar.
“For budgeting purposes, you don’t use the spot rate for anything. Oil price can go to 120 today, maybe there is a shortage, maybe there is 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. So, even the exchange rate is like that.
“Much as we are hoping that it would soon come below, but at the time you are doing the budget you will take a view on average performance. And that’s what we took,” Bagudu said.
The minister said the federal government was confident that the measures taken so far would substantially increase the supply of foreign exchange into the economy.
