The House of Representatives has urged a reevaluation of the 2024 budget projections in response to the recent depreciation of the naira against the dollar.
During a plenary session on Thursday, lawmakers discussed a motion titled “Need to evaluate the implications of the current exchange rates on the 2024 national budget implementation to ensure a balanced budget and increase in the standard of living of Nigerians.”
The motion, presented by Kafilat Ogbara, a member of the All Progressives Congress representing Kosofe Federal Constituency, Lagos State, highlighted concerns about the fluctuating exchange rate since the passage of the N28.7 trillion 2024 budget.
Ogbara, who chairs the House Committee on Women Affairs and Social Development, noted that the initial budget projections based on a projected N800 to the dollar were no longer feasible.
While the naira has shown some improvement in recent days, it still exchanged for N1,488 to $1 in the official market on Thursday.
Ogbara emphasized the correlation between exchange rate movements and macroeconomic indicators such as inflation, fiscal deficits, and economic growth. She highlighted the impact of exchange rate fluctuations on prices of imported goods, investment performance, interest rates, inflation, job market, and real estate sector.
The House expressed concern over the distortionary impact of the foreign exchange regime on the implementation of the 2024 Appropriation Act, noting significant variances in personnel cost, recurrent expenditures, and capital costs appropriated to various Ministries, Departments, and Agencies.
In response, the House mandated its Committees on National Planning and Economic Development, Appropriation, and Finance to conduct a comprehensive assessment of the implications of foreign exchange on the 2024 appropriation act. The committees are tasked with evaluating prevailing exchange rates, expected government revenue, spending plans across sectors, and recommending necessary adjustments to ensure budgetary effectiveness.
The committees have been given six weeks to report back to the House for further legislative actions.
