In reaction to the Naira’s decline versus other major currencies, the House of Representatives has started the process of reevaluating the parameters of the 2024 budget.
The House gave its Committees on National Planning and Economic Development, Appropriations, and Finance instructions to examine the budgetary constraints during Thursday’s meeting, with a specific emphasis on the currency rate.
This judgement was made in response to a motion made in plenary by Kafilat Ogbara (APC, Lagos) that was of urgent public interest.
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Ogbara drew attention to the Naira’s recent depreciation, which he partially attributed to monetary authorities’ floating of the currency.
The Central Bank of Nigeria’s actions have led to a recent recovery, although the current exchange rate of the Naira is far higher than the rate that was used to create the 2024 budget, which was set at N800 to the dollar. The Naira is now trading at N1,605 to the dollar.
Ogbara emphasised that these variations have caused inflationary pressures, affecting prices above the forecasts in the budget and possibly impeding the successful execution of the 2024 budget.
As a result, she suggested that the National Assembly examine every item in the 2024 Appropriations Act.
The resolution was overwhelmingly approved by the House, and the committees were tasked with carrying out a thorough analysis of the impact of foreign exchange on the budget for 2024.
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They are specifically to assess the impact of exchange rate variations on purchasing power and the overall efficacy of budgetary practices. The committees will also examine projected government revenue from different sources, such as taxes and other kinds of income.
The measure was approved without discussion and requires the committees to finish their assessments in six weeks.
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