The Federal Government is proposing to borrow the sum of N5.62 trillion to finance budget deficits in the 2022 fiscal year.
This is contained in the 2022-2024 Medium Term Expenditure Framework/Fiscal Strategy Paper ( MTEF/FSP) sent to the National Assembly by the executive arm of the government.
The Minister of Finance, Budget and National Assembly, Mrs Zainab Ahmed, who presented the highlights of the MTEF/FSP at an interactive session organized by the House of Representatives Committee on Finance for Ministries, Departments and Agencies ( MDAs), said the government is also proposing a reduction in capital expenditure.
Mrs Ahmed 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 per cent of the estimated GDP, which is slightly above the 3 per cent threshold that is spent recommended in the Fiscal Responsibility Act.”
According to her, the aggregate capital expenditure for the 2022 fiscal year is projected at N3, 61 6, 30 2, 881, 369 against N4, 374, 199, 343, 849 approved by the parliament in 2021.
The minister explained that, out of the aggregate capital expenditure, “the sum of N1,759,804,022,579 as opposed to the N2,019,119,204,546 will be available to the MDAs of government in 2022.”
Ahmed added that the macro-economic assumptions in the MTEF/FSP crude oil benchmark is pegged at $57 per barrel for 2022, while crude oil production is pegged at 1.88 million barrels per day,
Similarly, the exchange rate is pegged at N410.15 to one US dollar, with an inflation rate of 13 per cent in 2022, and a nominal GDP of 149.369 trillion.
However, the House cautioned the government against making unrealistic projections in the 2022 Appropriation Bill to be presented to the National Assembly.
The speaker, Femi Gbajabiamila, stated this, on Monday, while declaring open the interactive session between the House Committee on Finance and MDAs on the 2022-2024 MTEF/FSP.