In a recent interview with Channels Television, Senator Ali Ndume made remarks indicating that the Nigerian government is benefitting from the depreciation of the naira against the dollar.
The fiery Senator disclosed that the depreciation has led to increased revenue for funding the 2024 budget, which was presented by President Bola Ahmed Tinubu in November last year.
He emphasized that the 2024 budget operates on a ‘dollarized’ income basis, primarily reliant on revenue generated from crude oil exports, which are priced in dollars. He pointed out that as the value of the dollar rises, the government accrues more naira, which can be utilized for domestic expenditures denominated in the local currency.
Explaining further, Ndume highlighted the ongoing high demand for Nigeria’s major export commodity, crude oil, in the global market. He underscored that despite the depreciation of the naira, the country stands to benefit from the current exchange rate between the dollar and the naira.
He stated, “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.”
“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.”
While acknowledging the decline in the value of the naira against the dollar, Ndume emphasized that Nigeria’s primary revenue source, crude oil exports, continues to be transacted in dollars. Hence, any dollar earned is calculated at the prevailing exchange rate, potentially resulting in increased revenue for the government.
Concluding his remarks, Senator Ndume suggested that upon thorough analysis, Nigeria might actually have more funds available to fulfill its budgetary obligations.
“So if you do the analysis critically, it may mean if you balance it up, we may have more money to fund our budget. So technically, Nigeria is even benefiting from the dollar-to-naira hike.”, He said.
