The federal government has submitted a proposal to borrow N5.62 trillion to finance the budget deficit in the 2022 budget.
This is just as the government disclosed that it would cut down on capital expenditure in 2022 by N259.315 billion.
The minister for finance, budget, and national planning, Zainab Ahmad, while presenting the 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) before the House Committee on Finance, stated that the reduction became necessary given economic volatility occasioned by unstable global oil market as well as the effects of the COVID-19 pandemic.
“On capital expenditure, the sum of N1,759,804,022,579, as opposed to the N2,019,119,204,546, will be available to Ministries, Departments and Agencies of government in 2022,” she said.
The minister told legislators that the naira is being pegged at N410 to $1, as that the projection is likely to come down in favour of the naira in 2023.
Read Also:
Explaining the deficit, the minister said: “The budget deficit that is projected for 2022 is N5.62 trillion, up from N5.60 trillion in 2021. 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, then privatisation proceeds of N90.73 billion and drawdowns from existing project titles of N635 billion.
“This amount represents 3.05 percent of the estimated GDP, which is slightly above the three percent threshold that is spent as recommended in the Fiscal Responsibility Act.
