The Senate has warned the executive against increasing the budget size through a supplementary budget, advising the government to use the excess savings that are expected to be made from the recent depreciation of the naira to fund the deficit.
This came against the backdrop of the depreciation of the local currency against the United States dollar from N900/$r to over 1,500/$, following a series of moves by the Central Bank of Nigeria to unify the parallel and official market exchange rates of the naira.
The National Assembly had in December moved the 2024 budget benchmark exchange rate from N750/dollar sent by President Bola Tinubu to N800/dollar.
The Chairman of the Senate Committee on Appropriation, Senator Solomon Adeola, explained, “The current price of the dollar at the black market is between N1200 and N1300 and in the Central Bank of Nigeria, it is between N950 and N1000 and we have a budget which was pegged at N750, if you look at the gap, you’d realise that has covered a lot of gaps already.”
“Again, we did some external consultations, most especially in the area of oil benchmark and petroleum resources, if we had gone in that line, we’d have pegged it at N850/N900 to a dollar and we agree that we want to be conservative in our approach, so that nobody will think that we want to increase the budget for any ulterior motive, that was why we left it at N490bn out of which N44bn is for statutory transfer, so effectively, the increment is about N446bn that is going into the Federal Government pocket as consolidated revenue.”
“So, you can see that what necessitated our action is the economic reality and what is obtainable in both the black and open markets.”
However, following the depreciation of the naira from N900/dollar to over N1,500/dollar, the Senate has advised the Federal Government against increasing the budget size, saying the move could worsen the country’s already high inflation rate.
Rather, the Senate said the executive should use the excess savings to cut down on loans it would seek to fund the deficit in the budget.
The Chairman of the Senate Committee on Banking, Insurance and other Financial Institutions, Tokunbo Abiru, in an exclusive interview with newsmen advised the Federal government to avoid increasing the budget size.
He also advised that gains from the budget should be spent on reducing the budget deficit.
