Foreign exchange budgeting and monitoring in Nigeria.

Abstract

It was once observed that the character of a nation is written in its budget. Although this may be an overstatement, there is no doubt that the national budget is a plan or blue print for guiding the activities of the government over a period of time, usually one year. Accordingly, the budget embodies government intentions and policies that if would like to pursue in the coming year together with a financial plan describing in detail the estimated receipts and proposed expenditures/disbursements under various heads. The focus of this paper is on foreign exchange budget, in other words, budgeting for expected foreign exchange earnings and allocation among various possible uses. To a large extent, foreign exchange budget is associated with foreign exchange control regimes. Since exchange control is adopted primarily because of shortage or inadequacy of foreign exchange resources, the need to optimally use the available resources necessitates the drawing up of a foreign exchange budget. For ease of analysis, the rest of the paper is structured as follows: In the next section the principle of foreign exchange budgeting in general is examined. Here the rationale and elements of foreign exchange budget are briefly discussed. Foreign exchange budgeting, in Nigeria is discussed in section three. In section four, the focus is on the need for monitoring and the arrangement put in place for monitoring foreign exchange budget in Nigeria. Section five appraises foreign exchange budgeting and monitoring in Nigeria while concluding remarks are contained in section six.