7th October, 2021
President Muhammadu Buhari said his government will borrow an additional N5.01 trillion in 2022 to be able to execute its N16.39 Trillion budget.
He made this known today during the presentation of the budget to the National Assembly.
Buhari described the budget as Budget of Economic Growth and Sustainability.
Capital expenditure will gobble N5.35T and debt service N3.61T.
Total recurrent expenditure will be N6.83T, out of which personnel cost will consume N4.11T.
Total revenue expected is N10.13T.
Oil revenue will be a third of it as it is estimated at N3.16T. Non oil taxes will be N2.13T and Federal Government revenue from its MDAs will be N1.82T.
President Buhari said the oil benchmark for 2022 has been put at $57 and daily production at 1.88 million barrels, including condensates.
Government expects exchange rate to be stable at N410.15 to US Dollar and inflation to be kept at 13 percent.
Buhari tried to allay the fears of critics of borrowing by government.
He said the loans were within what Nigeria could afford and that the crisis the nation faces is ‘revenue challenge’, so that it can sustain repayment of the loans.
“Some have expressed concern over our resort to borrowing to finance our fiscal gaps. They are right to be concerned. However, we believe that the debt level of the Federal Government is still within sustainable limits. Borrowings are to specific strategic projects and can be verified publicly.
“As you are aware, we have witnessed two economic recessions within the period of this Administration. In both cases, we had to spend our way out of recession, which necessitated a resort to growing the public debt. It is unlikely that our recovery from each of the two recessions would have grown as fast without the sustained government expenditure funded by debt.
“Our target over the medium term is to grow our Revenue-to-GDP ratio from about 8 percent currently to 15 percent by 2025. At that level of revenues, the Debt-Service-to-Revenue ratio will cease to be worrying. Put simply, we do not have a debt sustainability problem, but a revenue challenge which we are determined to tackle to ensure our debts remain sustainable.
“Very importantly, we have endeavoured to use the loans to finance critical development projects and programmes aimed at improving our economic environment and ensuring effective delivery of public services to our people”.
