Zainab Ahmed, Minister of Finance, Budget and National Planning, has said the financial authorities in the country are working to close the gap between the official and unofficial foreign exchange rates.
Ahmed said this during an interview with Bloomberg TV, a US-based financial media outlet, on Friday.
The naira is currently changing for N410/$ at the official segment of the market and N570/$ at the parallel market.
But according to the minister, the ministry alongside the Central Bank of Nigeria (CBN) is working hard to improve foreign exchange inflows, adding that that the country would earn forex through petroleum product sales to foreign countries.
She said: “It is our desire to be able to reduce the gap between the unofficial market rate and the official market rate. We are working with the central bank to do that.
“Again, what we have to do is to improve the sources of foreign exchange earnings. Right now, the predominant source is oil and gas.
“When oil and gas revenues are not coming as we projected or when we have huge expenditure in terms of subsidy, we have the problem of supply not being able to meet demand.
“Like I explained earlier on, with a saving of up to 30 percent of forex expenditure with the removal of the need to buy PMS from out of the country, we will have more FX to meet demand.
“The high price of oil means that we would be able to earn more revenue. At $85 per barrel is way above the $40 per barrel we have on our 2021 fiscal projections.”
“But we also have the challenge of having to buy petroleum products for use in-country, because we do not have functional refineries. So that eats into the revenues we would have otherwise realised.”
Ahmed also lamented that Nigeria’s debt is huge because of her large expenditure, noting that it is chalking off the country’s growing revenue from non-oil sectors.
She said: “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 blamed Nigeria’s high debt service to revenue ratio on the large expenditure base of the country.
“Our debt service to overall revenue is high because we have a very large expenditure base,” she added.
“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.”
