Reps question Adeosun, Udoma on exchange rate, inflation

Minister of Finance, Kemi Adeosun and the Minister of Budget and National Planning, Udoma Udo Udoma were on Monday grilled by members of House of Representatives.

Both Ministers were questioned on the free fall of the naira against the US dollar and the rising inflation in the country.

They appeared before the House Joint Committees on Finance, Appropriation and Aid/Loans/Debt Management at the National Assembly in Abuja which said the  measures taken by the Federal Government to take Nigeria out of recession were not working.

One of the issues raised was that the dollar rate to naira in the 2017 budget was 305/$, the parallel market rate is 500/$.

The lawmakers also said the government projected inflation will be 15 per cent when it has already hit 18 per cent.

Chairman of the committee, Babangida Ibrahim, stated, “There is something that is fundamentally wrong with these projections and the huge gaps that we are seeing.

“There are even differences in the MTEF document you submitted to us at the National Assembly and the 2017 budget, which Mr. President laid before the National Assembly.

“There has to be a position where all of us can be on the same page in the efforts to rescue this economy out of recession.”

While responding, Adeosun said the crash of the naira was caused by buying and stocking of the dollars which led to panic.

“There is nothing to justify what is happening; this difference between the official and the black market rates has no fundamentals to support it.

“In reality, the naira should not be affected more than the N305,” the finance minister stated.

Adeosun said those stocking the dollars will regret it when the exchange rate hike crashes.

Udoma on his part said the 18 per cent inflation rate was unrealistic.

He attributed the present rising trend to “panic” in the system, fuelled by the forex crisis.

Udoma said the exchange rate will crash and in turn cut down inflation rate.

“Our target is 15 per cent because that is what we believe it will be.

“The exchange rate is what is causing it now, but we will soon attain stability and inflation will be down naturally at the 15 per cent,” he told lawmakers.

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