In a recent revelation, Senator Ali Ndume shed light on the Nigerian federal government’s strategic approach to navigating the current depreciation of the naira against the dollar. Contrary to concerns about potential losses, Senator Ndume emphasized that the government is, in fact, capitalizing on the situation to bolster revenue for its 2024 budget.
President Bola Ahmed Tinubu presented the 2024 budget last November, emphasizing its ‘dollarized’ nature concerning income. The bulk of the government’s revenue is derived from crude oil exports, which are priced in dollars. Senator Ndume explained that as the value of the dollar rises, the government stands to gain more naira to allocate towards its expenditure, which is denominated in naira.
During an insightful interview with Channels Television, Senator Ndume highlighted that despite the depreciation of the naira against the dollar, Nigeria’s major export, crude oil, continues to command high demand in the global market. Consequently, the country stands to benefit significantly from the current dollar-to-naira exchange rate.
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He articulated, “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.”
Acknowledging the apparent fall in the value of the naira against the dollar, Senator Ndume clarified that the nation is essentially selling its major product, crude oil, which generates income in dollars. Therefore, any dollar acquired will be valued at the prevailing dollar-to-naira exchange rate.
In a nuanced perspective, Senator Ndume concluded, “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.”
This strategic use of the exchange rate dynamics showcases the government’s adaptability in leveraging economic conditions to optimize financial outcomes for the nation’s fiscal plans.
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