President Bola Tinubu has written to the National Assembly (NASS) to seek approval to borrow N1.767 trillion as part of the 2024 appropriation act to attend to the budget deficit.

Tajudeen Abbas, Speaker of the House of Representatives, read the president’s letter to the house’s hearing during Tuesday’s plenary session.

According to this letter, the 2024 budget had a N9.7 trillion budget deficit, and the new loan was to help drop that figure to N8 trillion.

EQ understands that the government’s erroneous pegging of the dollar to the naira exchange rate for the 2024 budget at N800/$1 and $3.58 billion spent on debt servicing in the first nine months of the year contributed to this deficit.

In 2023, the federal government pegged the exchange rate at N435.57/$1, but increased the figure by almost 100% the following year.

Meanwhile, in April 2024, merely four months into the year, the naira began trading for N1,278/$1. This represented a N478 difference from what the FG had projected in the annual budget.

READ ALSO: Tinubu Wants National Assembly to Increase 2024 Budget by N6.2 Trillion

At this time, while the government’s original N28.78 trillion budget represented $35.97 billion with the N800/1$ rate, the new rate made it $22.52 billion by April. If one deducts monies already spent before this N478 currency decline, then the figures would be different, but this recalculation considers fixed rates.

If the budget remained the same in April, then the country would have lost $13.45 billion without doing anything.

By November, the naira traded at N1,652.25/$1, more than 100% of what the government projected at the start of the fiscal year.

The presidency has again sent a N47.9 trillion 2025 budget to the NASS for approval and, while they say they peg the exchange rate at N1,400/$1 now, the true market rate means the budget’s current dollar value is $28.991 billion, making it smaller than the 2023 budget because of the declining naira value.

If the NASS approves the loan request, Nigeria will be going into 2025 with an N8 trillion 2024 budget deficit and the expectation of accruing more deficits from the next budget.
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