Nigeria expects to receive US$10bil of inflows in the coming weeks that will help ease a liquidity crunch weighing on the naira. — Bloomberg
ABUJA: Nigeria’s government plans to raise nine trillion naira (US$11.98bil) of debt to help fund next year’s budget, says Ben Akabueze, the head of the West African nation’s budget office.
“We are going to spend 26 trillion and we are looking to raise 17 trillion in revenue and the balance in debt,” Akabueze said in an interview at the Nigerian Economic Summit in the capital, Abuja.
Details of the 2024 budget proposals will be presented to lawmakers by the middle of November, he said.
Nigeria expects to receive US$10bil of inflows in the coming weeks that will help ease a liquidity crunch weighing on the naira.
The government has a “line of sight” on the inflows into the country “in weeks rather than months,” Finance Minister Wale Edun said at the Nigerian Economic Summit in the capital, Abuja, on Monday.
The funds are expected to come from several sources including foreign direct investment and sovereign wealth funds, he said later.
The naira slid about 4% against the dollar on Monday amid insatiable demand for the greenback.
The decline came days after the central bank ended curbs on using dollars to buy dozens of imported items, and at a time of the year that typically sees Nigerians making payments for tuition at foreign schools and universities.
Nigerian authorities plan to broaden the official foreign-exchange market as a step toward outlawing the parallel market, a senior member of President Bola Tinubu’s administration said.
The central bank plans to allow other participants including bureaux de change and financial-technology companies that provide mobile-money services, Taiwo Oyedele, chairman of the presidential committee on fiscal policy and tax reforms, said.
Once the official market has been expanded, the parallel market will be turned into “a black market, which is just for elicits and speculators,” Oyedele said.
Nigeria’s currency plummeted about 4% to 1,215 a dollar on the streets of the nation’s cities on Monday.
The naira was trading at 1,170 a dollar last Friday, according to Abubakar Mohammed, chief executive officer of Forward Marketing Bureau de Change Ltd, which compiles the data.
The currency slipped to 808.27 naira a dollar at close last Friday from 782.67 the previous day in the official market, Lagos-based FMDQ, which tracks the data, reported on its website.
Liquidity in the official market declined last Friday compared with the previous day.
Spot transactions dropped 14.1% to US$76.38mil and forward contracts decreased 66.1% to US$2.88mil, investment bank Chapel Hill Denham said in note on Monday.
The Central Bank of Nigeria is preparing a document that will set out clearly the rules of the foreign-exchange market, governor Olayemi Cardoso said at the summit.
The central bank is focused on ensuring Nigeria has a market that is “predictable and without flip-flops,” Cardoso said. “We do need to have a situation where the rules are clear to everyone.”
Cardoso said that while efforts to unify the foreign exchange market have not been perfect, they have led to more revenue coming into the country.
Tinubu’s government has sought to end multiple exchange rates among other measures to bolster confidence in the naira. — Bloomberg
