*Says relocation of apex bank’s departments not political
*FIRS targets N19.2trn revenue for 2024
Nigeria lost a total sun of $40bn in 10 years funding foreign education, healthcare and medical tourism, the Governor of the Central Bank of Nigeria, Yemi Cardoso disclosed on the floor of the House of Representatives on Tuesday.
This is just as the CBN boss noted that the country lost about $12.21bn to food importation in 39 years.
Th CBN boss disclosed this on Tuesday at the resumed sectoral debate series organised by the House of Representatives for Ministries, Departments and Agencies of government.
Independent reports that in November 2023, the House invited heads of security agencies to commence the debate series, which are aimed at availing Nigerians of strategies by the various MDAs to address the challenges facing the nation via the implementation of the 2024 budget.
He said, “It’s crucial to highlight that between 2010 and 2020, foreign education expenses amounted to a substantial US$28.65 billion, as per the CBN’s publicly available Balance of Payments Statistics. Similarly, medical treatment abroad has incurred around US$11.01 billion in costs during the same period. Consequently, over the past decade, foreign exchange demand for education and healthcare has totaled nearly US$40 billion.
“Notably, this amount surpasses the total current foreign exchange reserves of the CBN. Mitigating a significant portion of this demand could have resulted in a considerably stronger naira today.
“Continuing on the topic of the demand for US Dollars, Nigeria’s annual imports, which require dollars for payment, amounted to US$16.65 bn in 1980. By 2014, the annual import expenditure had significantly surged to US$67.05 billion, although it gradually decreased to US$54.71 billion as of last year. Similarly, food imports escalated from US$2.63 billion in 1980 to US$14.84 billion in 2019.”
Highlighting other areas which gulped a significant amount of foreign exchange, Cardoso said, “Looking at the demand side of the exchange rate, it’s important to note the growing number of Nigerian students studying abroad.
“In the 1980s and 1990s, the need for US Dollars for their living expenses was minimal. However, recent data shows a significant change. According to UNESCO’s Institute of Statistics, the number of Nigerian students abroad increased from less than 15,000 in 1998 to over 71,000 in 2015. By 2018, this figure had reached 96,702 students, as per the World Bank.
“Another report projects the number of Nigerian students studying abroad to exceed 100,000 by 2022. Additionally, the UK’s Higher Education Statistic Agency noted a 64 per cent increase in Nigerian students studying in the country, rising from 13,020 in the 2019/2020 academic session to 21,305 by the 2020/2021 session.”
Despite these challenges, the CBN boss assured Nigerians that the economy has started making a good recovery, saying, “We are now at a turning point, and the bold reforms underway across different segments of the economy, though initially challenging, are aimed at addressing these challenges sustainably.
“Notably, recent reports from international rating agencies such as Fitch, Moody’s, S&P and commendations from multilateral banks like the World Bank reflect this positive trajectory, with upgrades to Nigeria’s ratings from stable to positive.
“These reports acknowledge the potential reversal of the deterioration in the country’s fiscal and external position due to the authorities’ reform efforts. While recognizing the painful adjustments, they all point to a direction that will unlock much needed growth and development for our economy in the medium to long term.
“I acknowledge that despite these commendations, the concerns regarding the cost of living and currency exchange rates remain. Indeed, this is the major topic of concern in our villages, towns and cities. The urgency of the matter is not lost on us at the Central Bank and I assure you that we are working tirelessly with colleagues from across government, including with the leadership of this House, to bring lasting solutions.
“In this challenging landscape, key policy priorities involve ensuring durable inflation reduction, addressing fiscal pressures, and fostering sustainable and inclusive growth. The global monetary policy environment is expected to remain restrictive until sustained inflation reduction becomes evident,” he said, stressing that “Governments must grapple with rising fiscal pressures, necessitating credible medium-term fiscal frameworks to effectively manage debt burdens.”
Domestically, Cardoso noted that Federal Government anticipates a 3.76 per cent real GDP growth in 2024, “Slightly surpassing the estimated 3.75 per cent for 2023.”
He continued, “This optimism is backed by key government reforms and the expectation of improved crude oil prices and production, which are set to drive economic growth.
“Each sector may face unique challenges and opportunities in 2024. The services sector is expected to thrive due to increased digital lending offerings, while the agriculture sector is projected to grow faster with improved productivity. Anticipated growth in the industry sector is linked to increased crude oil production.
“Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, aiming to rein in inflation to 21.4 per cent, aided by improved agricultural productivity and easing global supply chain pressures.
“The Nigerian foreign exchange market is currently facing increased demand pressures, causing a continuous decline in the value of the naira. Factors contributing to this situation include speculative forex demand, inadequate forex supply due to non-remittance of crude oil earnings to the CBN, increased capital outflows, and excess liquidity from fiscal activities.
“The shift to a market-driven exchange rate was intended to create a stable macroeconomic environment and discourage currency hoarding. However, short-term volatilities are attributed to arbitrage and speculation.
“To address exchange rate volatility, a comprehensive strategy has been initiated to enhance liquidity in the FX markets. This includes unifying FX market segments, clearing outstanding FX obligations, introducing new operational mechanisms for BDCs, enforcing the Net Open Position limit, and adjusting the remunerable Standing Deposit Facility cap.”
On the relocation of some CBN departments to Lagos, Cardoso ruled out political consideration, saying “We did not change anything. We did this in order to get closer to the banks for best results.”
Economy looking good- Bagudu
Meanwhile, the Minister of Budget and National Planning, Atiku Bagudu has said that the economy is now better than the state President Bola Tinubu met it when he assumed office in May 2023.
According to him, “The challenges of the moment are being dealt with. We have been meeting with the Coordinating Minister of the Economy in addressing the issues affecting the nation’s economy. The key focus of the budget is on agriculture, security and infrastructure. The allocation of 39 per cent of the budget is a step in the right direction. For now, our focus is to improve on our revenue collection strategies.”
Lawmakers pledge commitment to address nation’s challenges
The House of Representatives has pledged its readiness to confront the stark realities of the economic, fiscal, and revenue challenges currently confronting Nigeria.
The Deputy Speaker Benjamin Kalu who presided over the debate series in the absence of the Speaker, Abbas Tajudeen at the resumption of plenary, made the pledge on Tuesday on the Floor of the Green Chamber.
“As we gather in this sectoral debate with the Central Bank Governor, the Chairman of the Federal Inland Revenue Service, the Minister of Budget and National Planning, and the Minister of Finance, it is imperative to recognise the urgency and importance of the agenda before us.
“We must also confront the stark realities of the economic, fiscal, and revenue challenges that our beloved nation, Nigeria, is currently facing.
“In a world of complexities and uncertainties, the path to fiscal integrity is not just a choice but a necessity. It is the bedrock upon which the trust between the government and its people is built and the foundation that supports the robust architecture of our national economy.
“Fiscal integrity ensures transparency, accountability, and the prudent management of our nation’s resources. It is our duty and responsibility to safeguard this, not just for the present generation but for the future ones that will inherit the outcomes of our decisions today,” he said.
Challenges over soon- Edun
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun on his part assured Nigerians that current challenges would soon give way to a reinvigorated economy owing to the reforms being implemented by the Federal Government.
“We are where we are today as a result of series of economic policies over the years. Inflation has increased and the cost of living has gone up but palliatives have been rolled out. Oil production has steadily increased as a result of improved security in oil producing areas and sustained fight against oil bunkering and other criminalities in the areas.
“Today, the country is producing about 1.65mpb a day and it is rising. We have to focus on domestic resource mobilization to address our challenges,” he said.
He further that inflation, exchange rates fluctuations and other factors are being addressed while agriculture is receiving attention for maximum production coupled with emphasis on the non-oil sector for economic diversification.
.FIRS targets N19.2trn revenue for 2024
On his part, Chairman of the Federal Inland Revenue Service, Zaach Adedeji said the agency is committed to its mandate of collecting revenue on behalf government.
Adedeji noted that though the FIRS targeted the sum of N10trn in 2023, it was able to collect a total of N12trn; a disclosure that left the lawmakers impressed.
“In 2024, our target is N19.2 trn. We are not going to introduce new taxes but we are determined to bring more Nigerians into the tax net,” he said.
