Atiku Bagudu, the Minister of Budget and National Planning, shared this information during a conversation with State House correspondents.
He clarified that, in determining the projected exchange rate of N750 to the dollar in the 2024 budget (later raised to N800 to the dollar by the National Assembly), the government thoroughly examined and assessed the average performance of the naira.
He said, “For budgeting purposes, you don’t use spot rate of anything. Oil price can go to $120 today, maybe there is a shortage., maybe there is a collision between two ships that will block a channel.
”It would be foolish to use that as a reference price. I should take a period, maybe six months to one year, and say let me observe this average behaviour, so you don’t use spot prices.
“Much as we are hoping that it would soon come below, but at the time you are doing the budget, you will take a view on average performance. And that’s what we took.
“In fact, we took an average performance of $750 on the executive side and proposed it to the National Assembly and the National Assembly in its wisdom and, mind you this is democracy, and President Tinubu is one who is a lifelong advocate of institutional separation of powers.,” Bagudu said.
He also said President Tinubu respected the National Assembly in allowing it raise further the exchange rate, considering his high regard for institutions and democracy.
Bagudu said further: “So, he respected democracy, even though it was higher than what he submitted, but the institution that says so has the authority to say so and even at the time, they say 100, because it’s not an official rate.
”With deregulated market, you no longer have an official rate, it is much lower than even the way the markets are bidding,” the minister said.
He noted that the federal government was sure that with the measures it was currently taking, there would soon be significant increase in the supply of foreign exchange into the economy.
