Budget 2024 new, but challenges same old ones – Rewane … Budget numbers are anything but close to realty

Although the 2024 budget maybe new and ambitious, the old unrelenting challenges may conspire to ensure the reality of the average Nigerian, who care more about the decrease in food prices remains a mirage, said Bismarck Rewane, Chief Executive Officer (CEO) of Financial Derivatives Company (FDC) Limited.
It will be recalled that the Federal Government of Nigeria (FGN) recently presented the N27.5 trillion 2024 budget proposal to a joint session of the 10th National Assembly in Abuja. “The proposed budget hopes to achieve job-rich economic growth (3.76%), price stability (inflation: 21.4 per cent, exchange rate: N750/$ per cent), a better investment environment, and poverty reduction.
“However, these ambitious budget numbers are anything but close to the reality of the average Nigerian, who cares less about budgetary arithmetic if the prices of major staples like bread and rice don’t decrease” said Rewane in the current FDC Wispers made available to Blueprint.
Already, the inflation rate has peaked at an 18-year high of 27.33 per cent, with no signs of slowing soon. More so, 63 per cent of the total population is multidimensionally poor.
He said, of all the challenges Nigeria faces today, the naira’s steep depreciation is the most problematic, as the official exchange rate is down 59.4 per cent to N1,137/$ Year-to-Date (YTD), falling short of the proposed Central Bank of Nigeria (CBN) and FGN target of N750/$.
“Though the central bank governor, Olayemi Cardoso, in a briefing recently, reaffirmed the apex bank’s commitment to settling forex backlog and stabilising the naira, the parallel market rate holds strong above N1000/$, with the spread between the official rate widening to 37 per cent from eight per cent post-forex liberalisation. Nigeria is at a crossroads, and it will take a lot more than public commitments to reduce speculation. The CBN needs to be transparent about its forex moves and stay on the path of monetary policy orthodoxy”, said FDC.
Rewane said, the third quarter Gross Domestic Product (GDP) is a pointer of things to come.
“Meanwhile, in the third quarter of 20’23, the Nigerian economy grew modestly to 2.54 per cent from 2.51 per cent in the second quarter of 2023, despite the high inflation and tough operating environment.
“The sluggish improvement in growth can be attributed to the lingering effects of fuel subsidy removal and exchange rate unification, which are stifling output growth.
” Looking ahead, it will take time for these structural reforms to unlock productivity to support GDP growth, especially in the real sectors of the economy like agriculture that struggle with climate change and insecurity”, he said

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