Utomi expresses concern exchange rates might go above $1/N1000

A political economist, Prof Pat Utomi says the exchange rate of the naira to the dollar may go above $1 to N1,000 if some “dramatic” measures are not taken by the Federal Government on Nigeria’s fiscal and economic policies.

He also said the ways and means funding option of the Federal Government through the Central Bank of Nigeria (CBN) has become a routine violation of fiscal responsibility laws.

“If you continue to generate or create money without creating value, the consequence is inflation and exchange rate will be collapsing, and will just multiply,” Utomi said on Channels Television’s Politics Today programme on Wednesday.

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Nigeria’s inflation rate as of the end of November 2022 is 21.47%. At the Investors and Exporters (I&E) window of the foreign exchange market, $1 exchanges for N450.03 as of January 4, 2023, while a single dollar goes for over N700 in the parallel market.

However, Utomi said unless some dramatic economic steps are taken, a single naira may exchange for over N1,000.

“I can tell you, God forbid, if we don’t do something dramatic, the effect of this budget is that the exchange rate will go past 1,000; that is the direct effect of this budget and you are going to see inflation probably go up to 50% if some new dramatic changes are not made,” he said making reference to the 2023 Appropriation Bill totalling N21.83 trillion signed into law by President Muhammadu Buhari on Tuesday.

Utomi, an ally of Labour Party (LP) 2023 presidential candidate, Peter Obi said the 2023 “weak budget” will lead to loss of jobs, inflation, and unimaginable economic hardship.

He described the economic policies of the Buhari administration as “not people-friendly” and “not economic-growth oriented”.

He blamed leadership at the centre and dysfunctional state governors for Nigeria’s economic woes and insisted that one of the ways forward is for the Federal Government controlled by the All Progressives Congress (APC) to fix the civil service.