Nigeria’s budget deficit is projected to increase from 5.60 trillion N in 2021 to 5.62 trillion N in 2022, Zainab Ahmed Minister of Finance, Budget and National Planning, said.
Mrs. Ahmed informed state legislators during a briefing after a meeting of the Federal Executive Council in Abuja on Wednesday.
The minister explained that the budget deficit represents 3.05% of estimated GDP, just above the 3% threshold specified in the Fiscal Responsibility Act.
“The FRA empowers the president to cross the threshold if his opinion states that he is facing a national security threat, and that is our opinion, and the FEC We agreed that we could go beyond that, “she said.
In recent years, Nigeria’s deficit finance has been a concern for Nigerian policymakers and international rating agencies.
Ahmed said the deficit will be covered by a total of 4.89 trillion Newtons of new foreign and domestic borrowings, 90.73 billion Newtons of privatization revenues, and 635 billion Newtons of drawdowns from existing project titles
The minister further explained that the ministry presented notes for approval of the medium-term spending framework from 2022 to 2024 and fiscal strategic documents required by the Fiscal Responsibility Act
“The MTEF / FSP consists of revenue and expenditure estimates, including medium-term macroeconomic forecasts, financial targets, and government financial obligations,” she said.
“We provided the council with a macroeconomic background base that set the quotes presented to the council.”
Speaking of the economy, the minister said the Nigerian economy had recovered from negative growth of -1.8% in 2020, 2.5% in 2021 and 4.2% in 2022. She added that inflation eased from a two-month high. It is now moderated and has dropped to 17.93%.
However, she added that foreign exchange reserves have declined from the previous month.
“The key macro assumptions presented after approval by the Board are: 2022 crude oil benchmark price of $ 57 per barrel, crude oil production of 1.88 million barrels per day, and dollar exchange rate of N410.15. US $ 1, 2022 inflation is 13%, and nominal GDP is 149.369 trillion, “she said.
“Interestingly, non-oil GDP continues to grow at 169.69 trillion, compared to 14.68 trillion oil GDP in nominal GDP. Nominal consumption is 130,493.6 billion.
“We also presented the federal government with projected revenues from 2022 to 2024. Especially for 2022, we expect revenues of 6.54 trillion N and 2.62 trillion N for federal accounts and VAT, respectively. The net oil and gas revenues that the FAAC can distribute will reach 6.151 trillion Newtons in 2022, which is projected to increase to 9.15 trillion Newtons in 2023. “
The minister said the total expenditure predicted and approved by the council was 13.98 trillion N total expenditure.
“This includes spending on 1.1 trillion Nyra state-owned enterprises and a total of 62.24 billion Nyra grants and donor-funded projects,” she said.
“This means that this budget is only 3% higher than the 2021 budget in terms of the size of spending.”
Regarding the report’s expected debt-to-income ratio, the minister said it was 43%, adding that all Nigerians are concerned about this number.
“The actual debt-to-revenue ratio in 2019 was 58%, so this is an improvement from 2019,” she said.
“In 2020, that ratio was up to 85%. Therefore, 2022 is a significant improvement over 2020.”
She further explained that the country is optimistic about growth after being affected COVID-19 Pandemic About the world economy. Culled From Illinois News