2022 Budget: FG will Borrow to Finance N6.258 Trillion Budget Deficit, Minister Says

The federal government has revealed that the projected 2022 Appropriation Bill’s N6.258 trillion budget deficit will be funded by local and international loans.

Mrs. Zainab Ahmed, Minister of Finance, Budget, and National Planning, disclosed this on Wednesday in a chat with journalists at the end of the weekly virtual Federal Executive Council (FEC) meeting, which was presided over by President Muhammadu Buhari at the State House, Abuja. FEC also approved the proposed N16.39 trillion budget for 2022.

Despite protests from many quarters, Mrs. Ahmed explained that the country’s goal of completing many of the administration’s legacy projects would be impossible to achieve without borrowing, stressing that the produced revenues are barely enough to fund recurring costs.

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Despite worries voiced about the administration’s frequent borrowings, the minister assuaged fears that the situation was already spiraling out of control, adding that Nigeria’s borrowings are still within healthy and sustainable boundaries.

“If we only rely on the income that we receive, even though our revenues have increased, government operational expenditures, such as wages and other overheads, are hardly covered or swallowed up by the revenue,” she said.

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“As a result, we’ll need to borrow in order to create these projects that will allow us to develop in a sustainable manner.

“Nigeria’s borrowing has caused a lot of alarm and debate, but when you look at the whole magnitude of the debt, it’s still within healthy and sustainable bounds.” Total borrowing is 23 percent of GDP as of July 2021.”