Christian George
The Minister of Budget and Economic Planning, Atiku Bagudu, has revealed why naira to dollar exchange rate can not be stable despite government settlement for N800/$ exchange rate.
Bagudu explained that what leads to the fluctuation of exchange rate are as an aftermath of uncontrollable circumstances.
The Minister who said this in an interview with The Sun, added that the president inherited “a dead economy.”
“For budgeting purposes, you don’t use the 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. It’s also like that with exchange rates.
“Much as we are hoping that it should come below, but at the time you are doing the budget, you will take a view based on average performance and that’s what we took. In fact, we took an average performance of N750 on the executive side and we proposed it to the National Assembly and the National Assembly, in its wisdom, and mind you this is democracy and President Tinubu is a lifelong advocate of institutional separation of powers.
” So, he respected democracy that even though it’s higher than what he submitted but the institution that says so has the authority to say so and even at the time they said 100 because it’s not an official rate, it’s guidance, because with the deregulated market, you no longer have an official rate, it’s much lower than even the way the markets are bidding and with the measures that are being taken, which we believe will increase the supply of foreign exchange into the system because, to borrow from Soludo, the President inherited a dead economy, dead in the sense that FOREX is not coming in. He explained what the concept of death means.
“So we believe that it’s not an unrealistic position to take by the National Assembly,” he said.
