Nigeria’s presidency spends N16.06bn to buy foreign currencies for international trips in one year

Nigeria’s Presidency through the State House has spent at least N16.06 billion to buy foreign currencies for international trips in the past one year under the administration of President Bola Tinubu.

This is according to an analysis of data from GovSpend, a platform by BudgIT, which tracks, analyses and presents Federal Government spending over time.

Covering a period from June 23, 2023, to May 25, 2024, the data includes spending by the president, vice president, First Lady, and the Chief of Staff to the President.

It also includes the purchase of foreign exchange (forex) for the Presidential Air Fleet.

In the 2024 budget, the State House, President, and Vice President have a total budgetary allocation of N14.5 billion for international trips. There is no allocation for the First Lady and Chief of Staff to the President for international travel.

The GovSpend data shows that about N6.24 billion was spent in 2023 between June and December. By 2024, about N9.82 billion has been spent between January and May.

It means that the Presidency has spent about 67.72% of its international trips budget in the first five months of 2024.

What the data is saying

President’s spending: The majority of the amount was spent by the president for his international trips. The President’s forex purchase was significantly higher, totalling N10.93 billion.

These funds were allocated for numerous international trips, including high-value purchases of foreign currency to support diplomatic missions and engagements abroad.

The President’s spending includes N82.04 million for the purchase of $176,392.80 for a trip to Ghana on July 28, 2023.

For various other international trips and replenishments of foreign exchange reserves, amounts such as N152.37 million, N228.55 million, and N146.65 million were expended on August 4, 2023, for purchases of $200,000, $300,000, and $315,300, respectively.

At least four times, N197.70 million was utilized for the purchase of $1,000,000 for presidential trips dated July 19, 2023. Further expenditures include N71.74 million, N18.33 million, and N135.93 million for purchases of €300,000 each for the President’s trips on September 6, 2023.

Vice President’s spending: The total expenditure for the Vice President amounted to N101.68 million. This includes expenses for purchasing foreign currency for various international trips and other related costs. On June 23, 2023, N58.66 million was allocated for the purchase of £1,000,000 (approx. $1,000,000) in UK Pounds for the Vice President.

On February 24, 2024, an additional N426.88 million was used to acquire $483,277.00 for the Vice President’s trip to Switzerland. On September 6, 2023, N43.02 million was spent on the purchase of €300,000 for the Vice President’s trips.

First Lady’s spending: The total expenditure for the First Lady’s international trips amounts to N623.05 million. On January 4, 2024, N149.79 million was allocated for the purchase of $152,831 for the First Lady’s trip to France.

In March 2024, N202.39 million was spent on purchasing $126,834 for the First Lady’s trip to Mozambique. On February 9, 2024, N144.57 million was allocated for the purchase of $96,118 for the First Lady’s trip to Addis Ababa, Ethiopia. Additionally, in March 2024, N126.3 million was spent on purchasing $83,967 for the First Lady’s trip to London.

Chief of Staff’s spending: The total amount spent by the Office of the Chief of Staff to the President was N59.24 million. This included expenditures for purchasing foreign currency for specific international engagements and preparatory activities for global forums such as the United Nations General Assembly.

The Office of the Chief of Staff to the President also saw expenditures such as N46.51 million for $100,000 for presidential trips to the UK on August 10, 2023.

Another allocation of N12.73 million was made for purchasing $79,740 for preparations towards Nigeria’s participation in the 78th session of the UNGA in the USA on November 22, 2023.

Presidential Air Fleet: The expenditures for the Presidential Air Fleet were also substantial, amounting to N4.97 billion. This category reflects the operational needs and readiness of the Presidential Air Fleet, including regular high-value allocations for forex transit funds to support the fleet’s international activities and maintain its operational capacity.

The Presidential Air Fleet received substantial funds for forex transit. Significant allocations include N387.60 million on August 15, 2023, N2 billion on August 16, 2023, and N713.22 million on August 29, 2023.

Dollar dominates spending

Based on the disclosed currency for some transactions, the dollar was the dominant foreign currency that was purchased as about N6.42 billion was spent to buy $9.98 million.

The expenditures on UK Pounds were relatively lower, totalling N58.66 million for £1 million. For Euros, about N269.02 million was spent to get €1.2 million.

The largest category of expenditure was on Forex Transit funds, amounting to over N9.42 billion. However, the type of foreign currency purchased was not disclosed.

More Insights

The exchange rate from the naira to the dollar has crashed by 70.3% so far under the administration of Bola Ahmed Tinubu.

On May 30, 2023, the naira traded for N464.5/$1 on the official market. However, the naira hit a July low at the end of last week, closing at N1,563.80/$1 on Friday, July 12, 2024

This steep decline in the value of the naira means that the cost of acquiring dollars has more than tripled within this period.

This depreciation has had a profound impact on the expenses incurred for international trips by the Nigerian presidency. The substantial increase in the naira-to-dollar exchange rate means that more naira is needed to purchase the same amount of dollars as before.

For example, if the presidency needed $1 million for an international trip in May 2023, the cost would have been N464.5 million.

By July 2024, the cost of the same $1 million would be N1.56 billion, except maybe the State House gets foreign currencies at a discount rate.

The data raises critical questions about the prioritization of government spending, especially given the ongoing economic challenges faced by many Nigerians.

The substantial amounts dedicated to international trips highlight the high costs associated with maintaining diplomatic engagements and the operational needs of the Presidential Air Fleet.

The government’s commitment to maintaining a robust international presence is evident; however, this financial outlay also highlights the necessity for transparency and judicious use of public funds, and the need for a balance between necessary governmental functions and fiscal prudence.