Senator Ali Ndume recently made intriguing comments during an interview with Channels Television, suggesting that the Nigerian government is gaining from the depreciation of the naira against the dollar.
According to the outspoken senator, the depreciation of the naira has resulted in increased revenue for funding the 2024 budget, which was presented by President Bola Ahmed Tinubu in November last year.
Senator Ndume highlighted that the 2024 budget operates on a ‘dollarized’ income basis, relying heavily on revenue generated from crude oil exports priced in dollars. As the value of the dollar rises, the government accrues more naira, which can be used for domestic expenditures denominated in the local currency.
He explained that despite the naira’s depreciation, Nigeria stands to benefit from the current exchange rate between the dollar and the naira due to the high demand for the country’s major export commodity, crude oil, in the global market.
Ndume emphasized, “Don’t forget that this budget is a ‘dollarized’ budget, especially in terms of the income. And when it comes to the terms of the expenditure, it’s in naira.”
He further elaborated, “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, because we are not spending in dollars, we are spending in naira, while we are getting our revenue in dollars.”
Despite acknowledging the naira’s decline against the dollar, Ndume emphasized that Nigeria’s primary revenue source, crude oil exports, is transacted in dollars. Therefore, any dollar earned is calculated at the prevailing exchange rate, potentially resulting in increased revenue for the government.
In conclusion, Senator Ndume suggested that upon thorough analysis, Nigeria might actually have more funds available to fulfill its budgetary obligations, indicating that the country is benefiting from the dollar-to-naira hike.
Politics Nigeria