The 2024 Appropriation Act has seen the Federal Government adopt a N800 to dollar exchange rate after considering the naira’s average performance. This move was made to avoid uncertainties and eventualities by not basing the foreign exchange benchmark on a spot rate. Atiku Bagudu, the Minister of Budget and National Planning, elucidated that the initially proposed exchange rate of N750 to the dollar was raised to N800 by the National Assembly. He emphasized the prudence of not using spot rates for budgeting purposes due to market fluctuations and potential disruptions.
Bagudu expressed optimism that the current measures would lead to a significant increase in foreign exchange supply in the economy. He also highlighted the reduced level of borrowing in the 2024 budget compared to the previous year, affirming the government’s commitment to operating within the confines of the fiscal responsibility law. This involves adhering to the prescribed 5% limit for the Central Bank of Nigeria to lend to the government through its Ways and Means window.
The Minister underscored the government’s stance against borrowing outside the law and indicated a preference for borrowing away from the central bank when feasible, citing potential cost savings. This commitment aligns with the government’s goal to borrow within legal limits and adhere to fiscal prudence principles.
