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Economy

Nigeria Fast Exceeding Borrowing Limit, Budget Office Warns

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The Director General, Budget Office of the Federation, Mr. Ben Akabueze, has expressed concern that Nigeria is fast exceeding its limited borrowing space.

Akabueze stated this at the International Conference Centre, Abuja, during the induction of newly-elected lawmakers of the 10th National Assembly, on Wednesday.

He said: “While the size of the FG budget for 2023 created some excitement, the aggregate budgets of all governments in the country amount to about 30 trillion Naira. That is less than 15 percent in terms of ratio to GDP.

“Even on the African continent, the ratio of spending is about 20 percent. South Africa is about 30 percent, Morocco is about 40 percent and at 15 percent, that is too small for our needs.

“That is why there is a fierce competition for the limited resources. That can determine how much we can relatively borrow. We now have very limited borrowing space, not because our debt to GDP is high, but because our revenue is too small to sustain the size of our debt. That explains our high debt service ratio.

“Once a country’s debt service ratio exceeds 30 percent, that country is in trouble and we are pushing towards 100 percent and that tells you how much trouble we are in. We have limited space to borrow.

“When you take how much you can generate in terms of revenue and what you can reasonably borrow, that establishes the size of the budget. The next thing would be to pay attention to government priority regarding what project gets what.

“The budget is not a shopping list. In the end, the budget only contained expenditure,” he said.

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Economy

Naira Depreciates Further, Sells at N1,517/$

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The Naira, on Monday, continued its depreciation against the US dollar in the foreign exchange market.

Data from the parallel market section and FMDQ showed further depreciation against the dollar on Monday.

At the parallel market, a Bureau De Change operator in Wuse Zone 4, Mistila Dayyabu, said that the Naira was sold as high as N1,517 per dollar on Monday morning.

“On Monday morning, the dollar was sold at N1,517 per dollar. However, on hearing the information about the coming of the Economic and Financial Crimes Commission (EFCC) operatives, we started selling at N1,500 this evening, ” he said.

The figure increased from the N1, 450 per dollar it traded at the weekend.

Similarly, at the official market, FMDQ data showed that they dipped to N1478.11 per dollar on Monday from N1466.31 last Friday.

This represents an N11.8 drop from the N1466.31 recorded last Friday.

Earlier, the Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, said the apex bank’s Monetary Policy Committee will do everything to bring down soaring Nigeria’s inflation, which stood at 33.22 per cent in March 2024.

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Economy

Bloomberg Report Captures Naira As World’s Worst Performing Currency

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Nigeria’s naira has experienced a reversal in its recent gains, emerging as the world’s worst-performing currency over the last month, according to a new Bloomberg report.

The Friday report emphasised that this development places increased pressure on the Central Bank of Nigeria to continue raising interest rates.

The naira has depreciated to 1,466.31 against the dollar, marking its weakest level since March 20.

This decline is attributed to the local scarcity of the US currency, with only $84 million available on Thursday, half of the previous day’s supply.

CBN governor, Yemi Cardoso, had previously hailed the naira as the best-performing currency globally as of April 2024.

The naira faced challenges in March, plummeting to as low as N1,600/$1 on the official market and N1800/$1 on the parallel market.

Cardoso attributed this achievement to a series of foreign exchange market reforms and positive sentiment from leading international investment institutions.

The Punch

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Economy

Naira Begins Week on a Low, Trades at N1,419/$1 in Official Window

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The Naira began the week on a losing note against the American dollar on Monday, April 29, 2024 at the official window to trade at N1,419/$1.

This is according to data sourced from the Nigerian Autonomous Foreign Exchange Market (NAFEM) window.

At the end of trading on Monday, the Naira lost N19.88 against the dollar compared to the previous exchange rate of N1,399.23/$1 on Friday, April 27, 2024.

The intra-day high and low recorded during the day were N1,451/$1 and N1,060 /$1 respectively, representing a wide spread of N391/$1.

However, the Naira gained against the dollar at the parallel section of the market trading at N1,330/$1 representing a gain of N100 compared to the N1,430/$1 it traded the previous day.

Contrastingly, the Naira gained against the pound. The domestic currency appreciated by N10 against the British Pound to trade at N1,640/£1 as against the previous trading price of N1,650/£1 representing a gain of N10 for the local currency,

The Canadian dollar however closed flat against the naira to trade at N1,000/CA$1 same as the previous trading day rate.

The Euro also slumped against the Naira to trade at N1,430/€1 as against the rate of N1,450/€1 the previous trading rate indicating a gain of N20 for the Nigerian currency.

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