The Senate has warned the executive against increasing the budget size through a supplementary budget, advising the government to use the excess savings that are expected to be made from the recent depreciation of the naira to fund the deficit.
This came against the backdrop of the depreciation of the local currency against the United States dollar from N900/$ to over 1,500/$, following a series of moves by the Central Bank of Nigeria, CBN to unify the parallel and official market exchange rates of the naira.
The National Assembly had in December moved the 2024 budget benchmark exchange rate from N750/dollar sent by President Bola Tinubu to N800/dollar.
However, following the depreciation of the naira from N900/dollar to over N1,500/dollar, the Senate has advised the Federal Government against increasing the budget size, saying the move could worsen the country’s already high inflation rate.
Rather, the Senate said the executive should use the excess savings to cut down on loans it would seek to fund the deficit in the budget.
The Chairman of the Senate Committee on Banking, Insurance and other Financial Institutions, Tokunbo Abiru, in an interview with journalists advised the Federal government to avoid increasing the budget size.
He also advised that gains from the budget should be spent on reducing the budget deficit.
Also speaking in the same vein, the Deputy Chairman of the Senate Committee on Appropriation, Senator Ali Ndume, said the country would be saving over N600 on every dollar in the 2024 budget.
According to him, Nigeria earns over 60 per cent of its revenue in dollars and, as such, the fall of the naira against the dollar has created huge savings for the country.
