Lawmakers Reject N305/Dollar Exchange Rate for 2017 Budget
Members of the House of Representatives on Monday rejected the Federal Government’s plan to use an exchange rate of N305 to a dollar in the 2017 budget.
The lawmakers argued that pegging the exchange rate at N305 to a dollar for budget planning would engender huge corruption, as the exchange rate at the parallel market showed that the dollar was going for about N500.
The position of the legislators was communicated during an interactive session with members of the Executive with the committees on Finance, Appropriation, Aid Loans & Debt Management, Legislative Budget and Research and National Planning & Economic Development on the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), on Monday.
According to The Nation, the lawmakers also faulted the external borrowing plan of the President Muhammadu Buhari-led administration which would see the sum of N1.253 trillion being sourced from the domestic market.
They argued that the plan would stifle funds that could have been made available to the real sector and small businesses, in order to grow the economy and move the country out of recession.
The lawmakers also accused the government of not doing much to rein in inflation which presently stands at 18.55 percent, and of failing to consult enough with stakeholders as parameters in the budget differ from that in the MTEF initially submitted to the National Assembly.
Minster of Budget & National Planning, Senator Udo Udoma, said the government has a multi-faceted plan to move the country out of recession and to move towards a very low inflation environment. He added that government was doing a lot, which it believes would restructure the economy.
Finance minister, Kemi Adeosun said the government had put a lot of measures in place to stimulate the economy. She also urged Nigerians to be careful about putting their faith in the black market as it drives inflation.
“There is a number of structural initiative to close the gap. We have to look at why are people buying dollars at such high amounts. It’s driven by irrational and emotional factors.”
Adeosun said economic fundamentals showed that the Naira should be strengthening presently. “The black market will collapse because it’s not being driven by any fundamentals,” she said.
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