FG plans supplementary budget over rising inflation, depreciation

The Federal Government may offer a supplementary budget to the National Assembly as a result of a further depreciation of the naira and soaring inflation, which have rendered the 2023 budget nearly unachievable.

The 2023 budget proposes a foreign exchange rate of N435 per dollar and an inflation rate of 17.10 percent, however, due to a severe dollar shortage, the local currency might reach N500 per dollar on the NAFEX market and N1,000 per dollar on the parallel market.Information Guide Nigeria

Dollar closed at N895 in the parallel markets of both Lagos and Abuja, stoking fears that the doomsday forecast of N1000/$ by December may be realised.

Similarly, flooding and the global crises resulting from the Russia-Ukraine war might exacerbate inflation and poverty in the nation, rendering the estimates unworkable.

In the meanwhile, the National Assembly is expected to proceed with discussion and adoption of the budget as recommended in the Appropriation Bill submitted by President Major General Muhammadu Buhari (ret.), notwithstanding the significant disparity in exchange rates.JAMB Result

It was reliably learned on Thursday that the federal legislature may advise the administration to submit a supplemental budget to reflect the recent steep decline in the naira’s value versus the U.S. dollar.

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At the House of Representatives, key officials working on the appropriations bill told our correspondent that the parameters of the budget, which are based on the 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper approved by the legislature, are unlikely to be altered.

The National Assembly had, among other criteria, authorised an N437.57 per dollar exchange rate and a $73 per barrel oil benchmark in the MTEF/FSP.

However, in the Appropriation Bill presented by the President to a joint session of the National Assembly on October 7, 2022, the Federal Government recommended a benchmark oil price of $70 per barrel and an exchange rate of N435.57 per dollar.

On Thursday, the Deputy Chairman of the House Appropriations Committee, Iduma Igariwey, was asked if the National Assembly will modify the parameters, particularly the recommended exchange rate, to reflect the naira’s current state.

Igariwey, in response to his request for time to discuss with the committee chairman, Aliyu Betara, stated that it is possible that parliamentarians may not make significant adjustments to the budget.

He said, “The National Assembly, as a constitutional creation, can only act within the ambits of the Constitution. By virtue of Section 81 of the 1999 Constitution, it is the Executive arm that initiates the budget-making process and this the Executive arm does, through the President, present the estimates/ proposals to the National Assembly.

“However, bear in mind that the budget is preceded by the Medium Term Expenditure Framework and Fiscal Strategy Paper. What it means is that the budget process is informed by an economic plan.

“Now, in considering the budget estimates presented by Mr President, the National Assembly is expected to make only marginal input. Such input has even been controversial in the past, when the good and well-considered input of the parliament has been disparaged as ‘budget padding.’

“To deal with your question more specifically, the National Assembly is not likely going to make any substantial makeover of the 2023 budget as a result of the travails of national currency.

“However, the executive is constitutionally empowered to articulate and present to the National Assembly, a supplementary budget, and this 9th Assembly has always favourably considered such request, as happened in the 2022 budget year.”

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