Senator George Sekibo from Rivers State has opined that Nigeria’s inability to come up with a sustainable exchange rate is one of the major problems confronting the country.
The senator who represents Rivers East Senatorial District, while using the exchange rates as obtainable in 2016 and 2019 in his analogy said:
“If the exchange is N197 as it was in 2016, the budget of N16trillion would have been $83billion and not $39billion and in the worst-case scenario, if the exchange rate is N306 as it was in 2019, the budget would have been $53billion.”
He further explained that”alternatively, today’s N16trillion is equivalent to N7trillion plus if it were in 2016 and N12trillion plus as is in 2019. The instability of the exchange rate has been detrimental to huge trillion budget resulting to huge deficit and borrowing to sustain our economy.”
He advised that for Nigeria to survive, the federal government must develop a strong economic policy to stabilise the exchange rate.
“The instability of the exchange rate has been detrimental to huge trillion budget resulting to huge deficit and borrowing,” the senator observed.
Sen. Sekibo then charged the Central Bank of Nigeria to come up with strong monetary policies so that can ensure a stable exchange rate for two or three years.
“If that is not done, as long as the exchange rate fluctuates and the naira is diving down, the quantum of trillions in our budget will be increasing and the deficit will also be increasing, and the borrowing will also be increasing because they are all completely related.
“If we look at the budget from 2014 to 2022, you will observe a trend; deficit, borrowing, deficit, borrowing and oftentimes, the deficit is about equal to the capital budget provision.
“So it means if we don’t borrow, we would not be able to implement capital projects and even in this year’s budget you will see that if we don’t borrow, virtually all the capital projects cannot be implemented.
“And if the foreign partners we are expecting to give us money do not give us money, then we cannot implement capital projects and capital projects is the main essence of governance.
“Having said this, I want to suggest that government can go into public-private partnership with organizations as it is done in other advanced countries and bring infrastructure that can pay off itself in a number of years,” he added.
However, he wondered why in spite of the huge borrowings, Rivers State isn’t considered fit to enjoy the benefits of having capital projects executed in the state, since the state will be part of the paying medium, but isn’t benefiting from the borrowed funds.