Minister of finance, budget and national planning, Zainab Ahmed has said the country’s 2022 budget will be funded by a budget deficit with N4.89 trillion external and domestic loans.
Addressing journalists at the end of the federal executive council (FEC) meeting on Wednesday, she disclosed that council had approved the 2022-2024 medium-term expenditure framework/ fiscal strategy paper (MTEF/FSP).
The projected budget deficit for 2022 is N5.62 trillion, indicating an increase from N5.60 trillion in 2021.
According to the minister, the deficit would be financed by fresh local and international loans as well as other sources.
“This amount represents 3.05% of the estimated GDP, which is slightly above the 3% threshold that is specified in the Fiscal Responsibility Act.
“The FRA empowers Mr President to exceed the threshold in his opinion, the nation faces national security threats. And it is our opinion on fact agreed that we can exceed.
“The deficit is going to be financed by new foreign borrowing and domestic borrowing, both domestic and foreign in the sum of N4.89 trillion on privatisation proceeds of N90.73 billion and drawdowns from existing project tied loans of N635 billion.”
Ahmed further pointed out that the projected debt to revenue ratio in the MTEF report is 43 per cent.
“We know Nigerians all have concerns about the actual debt to revenue ratio in 2019 was 58%. So, this is an improvement over the preceding 2019. In 2020, the ratio was up to 85%. So 2022 is a significant improvement,” Ahmed said.
She said FEC had also approved an aggregate of N13.98 trillion, which is 3 per cent higher than the 2021 budget and that projected revenues for 2022 to 2024, pecifically for 2022 had been presented to the federal government and “the revenue that we expect is N6.54 trillion aandN2.62 trillion to accrue to the federation account on VAT, respectively.”