Budget 2022: Federal Government To Borrow N6.258 Trillion To Cover Deficits

Federal Government of Nigeria has announced plans to borrow N6.258 trillion to finance the proposed 2022 budget deficit.

The Minister of Finance, Budget, and National Planning, Zainab Ahmed said the N6.258 trillion will aid the Federal Government’s infrastructure projects.

The Finance Minister disclosed this during a press conference after the Federal Executive Council (FEC) meeting in Abuja on Wednesday.

Ahmed said, “Government has been borrowing before this administration and continues to borrow and it is important that we borrow to provide developmental projects in the form of roads, rails, bridges, power, and water for sustainable development in this country.

“If we just depend on the revenues that we get, even though our revenues have increased, the operational expenditure of government, including salaries and other overheads, is barely covered or swallowed up by the revenue.”

In defence of the government’s borrowings, the Minister said the move is necessary to be able to build projects and to ensure they are developed on a sustainable basis.

Despite the persistent agitations in some quarters against the frequent borrowing by the current administration, the Finance Minister argued that the total size of the borrowing is still within healthy and sustainable limits.

Ahmed added, “Nigeria’s borrowing, has been of great concern and has elicited a lot of discussions. But if you look at the total size of the borrowing, it is still within healthy and sustainable limits.

“As of July 2021, the total borrowing is 23% of GDP. When you compare our borrowing to other countries, we’re the lowest within the region, lowest compared to Egypt, South Africa, Brazil, Mexico, the very lowest, and Angola.

“We do have a problem with revenue. Our revenues have been increasing. We just reported to Council that our revenues from non-oil have performed, as of July, at the rate of 111%, which means outperforming the prorated budget.”

This follows the Federal Executive Council (FEC)’s approval of the 2022 Appropriation Bill for an aggregate expenditure of N16.39 trillion.

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