Finance Minister says Federal Government will borrow N5.62trillion to finance deficit in 2022 budget

The Federal Government has submitted a proposal to borrow the sum of N5.62 trillion to finance deficits in the 2022 budget, and also slash capital expenditure in 2022 by N259.315 billion.

The budget for 2022, as proposed by the Federal Government, is N13.918trillion.

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, said “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 Department and Agencies of government in 2022.”

On the exchange rate, the naira is being pegged at N410 to $1(US Dollar), just as that minister told legislators that the projection is likely to come down in favour of the naira in 2023.

Explaining the deficit, the minister said: “the budget deficit and the financing items for the expenditure. 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 3 percent threshold that is spent recommended in the Fiscal Responsibility Act.

“The revenue that we expect is N6.54 trillion N2.62 trillion to accrue to the Federation Account and VAT respectively,” she said.

She disclosed further that net oil and gas revenue which will be available for the Federation Account for distribution will be N6.151 trillion in 2022.