FG benefiting from Dollar-to-Naira hike – Ndume

In a recent interview on Channels TV, Senator Ali Ndume stirred debate by suggesting that the naira’s decline against the dollar might not be entirely detrimental to Nigeria’s fiscal health. According to Ndume, the 2024 budget, spearheaded by President Bola Ahmed Tinubu, operates on a “dollarized” income model, heavily reliant on revenue from crude oil exports, priced in dollars.

Ndume’s remarks illuminate a unique perspective on the economic implications of the naira’s depreciation. While many view it as a cause for concern, Ndume argues that the government stands to benefit from increased revenue due to the favorable exchange rate. With crude oil remaining a prized commodity in global markets, Nigeria could leverage the current exchange rate dynamics to bolster its fiscal position.

This stance challenges conventional wisdom surrounding currency devaluation, raising pertinent questions about the intricacies of Nigeria’s economic landscape and its reliance on dollar-denominated revenue streams. As the debate unfolds, stakeholders await further insights into the potential ramifications for Nigeria’s financial future.

“Don’t forget that this budget is a ‘dollarised’ budget, especially in terms of 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.

Truly, the value of naira against the dollar has fallen but we are selling our major product that we generate income in dollars. And that means any dollar we get now will also be valued at the current dollar-to-naira exchange rate.

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