2020 BUDGET: LCCI knocks Nigerian govt’s N305 foreign exchange benchmark

The Lagos Chamber of Commerce and Industry (LCCI) on Wednesday commended the return to the January -December budget circle but described as unrealistic the exchange rate assumption of N305 to the dollar.

The LCCI stated this through its Director-General, Muda Yusuf, adding that it was difficult to justify this assumption, especially when the country’s earnings were declining.

Read also: IMF says new minimum wage, VAT increase will trigger inflation rise in Nigeria in 2020

Yusuf said: “The key assumptions underpinning the budget are realistic except for the exchange rate assumption of N305 to the dollar. This is one assumption that is difficult to justify, especially at a time when declining revenue has become a major issue both for the government and the citizens.”

The LCCI contended that from the total budget size of N10.3tn having a recurrent component of N4.88tn and debt service of N2.45tn, there was not much left for infrastructure development.

Yusuf added: “Debt service commitment and recurrent spending are beginning to crowd out capital expenditure. This scenario is not in alignment with the aspiration to build infrastructure and a competitive economy. Debt service of N2.46tn is more than the capital budget of N2.14tn.”

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