2024 Budget Update: Federal Government Shift to N800/$ Exchange Rate, No More N750/$, Explains Why.

In a strategic move aimed at ensuring stability and foresight in fiscal planning, the Federal Government announced on Thursday that it deliberately avoided pegging the foreign exchange benchmark in the 2024 budget to a spot rate.

Atiku Bagudu, the Minister of Budget and National Planning, revealed this following his meeting with President Bola Tinubu. Bagudu emphasized the government’s cautious approach, explaining that using spot rates could lead to uncertainties, especially considering external factors such as oil price fluctuations and unforeseen incidents.

Addressing concerns over the projected exchange rate of N750 to the dollar in the 2024 budget, later adjusted by the National Assembly to N800, Bagudu highlighted the necessity of considering the naira’s average performance over a period of six months to a year for budgeting purposes.

Despite the increase by the National Assembly, Bagudu underscored President Tinubu’s respect for democratic institutions, emphasizing that the government is confident in measures to enhance foreign exchange supply and maintain fiscal responsibility in the 2024 fiscal year. Furthermore, the minister shed light on the government’s commitment to staying within the legal borrowing limits, highlighting a significant decrease in borrowing quantum compared to the previous year and a focus on efficient budget management.