The Federal Government on Wednesday announced plans to finance the proposed 2022 budget deficit pegged at N6.258 trillion through fresh borrowings.
Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed this during a press conference after the Federal Executive Council (FEC) meeting in Abuja, adding that this will aid the funding of the Federal Government’s infrastructure projects.
“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,” she said.
“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.”
While defending the government’s borrowings, she said the move is necessary to be able to build projects and to ensure they are developed on a sustainable basis.
In spite of persistent agitations in some quarters against the frequent borrowing by the current administration, the Finance Minister insists that the total size of the borrowing is still within healthy and sustainable limits.
She 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 is coming as the Federal Executive Council (FEC) approved the 2022 Appropriation Bill for an aggregate expenditure of N16.39 trillion.