***Acknowledges decrease in debt-to-GDP ratio from over 90% to around 60%
***Says reforms would soon bring down inflation, market volatility
Chairman of the Senate Committee on Finance, Senator Sani Musa, has addressed key developments following a crucial meeting with the Minister of Economy, the CEO of the Nigerian National Petroleum Company (NNPC), and other top government officials.
The discussions that happened at the Senate recently centered around President Bola Ahmed Tinubu’s recent directive to sell crude oil in naira, a move aimed at boosting the use of local refineries and reducing pressure on Nigeria’s foreign exchange reserves.
Nusa stated that the session was convened to assess the effects of the reforms on the Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper for 2024-2026.
He said It also aimed to address concerns about shortfalls in revenue remittances from the Nigerian National Petroleum Corporation Limited (NNPCL), particularly regarding the foreign and domestic excess crude accounts.
Senator Musa highlighted that while the 2024 budget was initially based on crude oil sales in dollars, there were concerns about potential implications of the shift to naira, particularly regarding exchange rates and the possibility of introducing hidden subsidies.
However, he reassured that the government clarified there would be no adverse impact on foreign reserves, as they remain primarily reliant on export-based crude sales. “The conversion of crude sales into naira will not affect the reserve or the exchange rate,” he affirmed.
The meeting also touched on broader economic issues, including inflation, food security, and the 2024 budget’s performance.
The Minister of Finance and Coordinating Minister of the Economy provided updates on efforts to curb inflation and ensure food security amid rising global challenges.
Additionally, the committee discussed changes in the payment system to enhance transparency and minimize financial leakages.
Senator Musa noted improvements in Nigeria’s debt management, with the national debt-to-GDP ratio decreasing from over 90% to around 60%, signaling positive movement in the nation’s fiscal health.
He acknowledged that while these improvements might not yet be felt directly, key economic indicators show progress.
One of the critical points raised during the meeting according to the chairman was the reduction of foreign exchange demand linked to oil importation, which constitutes about 65% of Nigeria’s forex needs.
By shifting crude oil sales to naira, he explained that the government aims to alleviate pressure on the currency and stabilize market fluctuations. Senator Musa expressed optimism that the reforms will yield positive results over the next 16 to 18 months, particularly in reducing market volatility and controlling inflation.
The Senate Finance Committee he assure will continue to work closely with the executive to ensure the economic reforms are effectively implemented while promising regular updates on their progress.
