Finance Ministry working with CBN to reduce gap between official and unofficial dollar rates – Minister

What the minister is saying 

According to Ahmed, the ministry is collaborating with the Nigerian Central Bank to close the gap between the official and unofficial dollar rates.

“It is our desire to be able to reduce the gap between the unofficial market rate and the official market rate. Again, what we have to do is to improve the sources of foreign exchange earnings. Right now, the predominant source is oil and gas,” she said.

The Minister also disclosed that revenues were growing but expenditure grew at a much faster rate.

“So, we do have a revenue problem. And we are working to curtail expenditure by being able to limit agencies’ expenditure to 50 per cent of their revenues,” she added.

Given the success of the country’s last bond, the minister said the country could approach the foreign capital market again this year.

She said that after the Dangote Refinery is operational in 2022, the country will be able to save 30% of its present oil spending and earn foreign cash through petroleum product sales to neighbouring countries.

She said, “Our debt service to overall revenue is high because we have a very large expenditure base. We have a large proportion of our budget dedicated to payroll, and Mr President had decided from the beginning of his administration that we were not going to disengage staff.

“So, you have to pay salaries, you have to pay pensions. And also, we have to fund the other arms of government, which are the judiciary and the legislature.”

What you should know

Nariametric reported a few days ago that the CBN Governor said that Nigeria could save close to 40% of foreign exchange spent on imports through a combination of the Dangote refinery and a petrochemical plant that will be launched in June-July 2022.

He added that when the project commences full operations, the currency would be floated and it would cease depreciation.