”Nigeria is benefiting from the dollar-to-naira hike. The budget is a dollarized budget” – Ali Ndume

Senator Ali Ndume has asserted that the Nigerian government is not at a loss due to the depreciation of the naira against the dollar; rather, it stands to gain increased revenue to support its 2024 budget.

During an interview on Channels TV, Ndume expressed his view that the 2024 budget, presented by President Bola Ahmed Tinubu in November, operates on a “dollarized” income basis. He explained that since a significant portion of the government’s revenue is generated from crude oil exports, priced in dollars, the budget essentially relies on dollar-denominated income. Consequently, as the value of the dollar rises, the government will receive more naira to allocate towards its expenditures, which are typically denominated in naira.

Ndume emphasized that Nigeria’s primary export, crude oil, remains in high demand globally, indicating that the country stands to benefit from the prevailing dollar-to-naira exchange rate.

“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