There are indications the Federal Government plans to submit a supplementary budget due to a further weakening of the naira and soaring inflation, which have rendered the 2023 budget unrealistic.
The 2023 budget sets the foreign exchange rate at N435 per dollar and the inflation rate at 17.10%. However, due to the acute dollar shortage, the local currency may reach N500 per dollar on the NAFEX market and up to N1000 per dollar on the parallel market in 2023.
Naija News reports that the dollar which recently ended at the rate of N895/$ on the parallel market may shoot to 1000/dollar by December.
Despite the significant disparity in currency rates, the National Assembly is expected to proceed with considering and passing the budget outlined in the Appropriations Bill presented to it by President Muhammadu Buhari.
According to sources, the federal legislature may suggest that the administration submit a supplemental budget to account for the recent steep decline in the value of the naira versus the US dollar.
Also, it has been reported that lawmakers might not make changes to the budget’s parameters due to the Fiscal Strategy Paper and the Medium Term Expenditure Framework for 2023–2025, which were approved by the parliament.
The Appropriation Bill, which was delivered by the President before a joint session of the National Assembly on October 7, 2022, however, included recommendations from the Federal Government for an oil benchmark of $70 per barrel and an exchange rate of N435.57 to the dollar.
The deputy chairman of the House Appropriations Committee, Iduma Igariwey was questioned about whether there would be an adjustment in the criteria, particularly the suggested exchange rate, to take into account the naira’s present state of affairs.
Igariwey 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, he stressed.
“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,” he added.
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