Zainab Ahmed, the Minister of Finance, Budget, and National Planning, has said the federal government will borrow to cover the N6.258 trillion debt problem in the 2022 budget.
While briefing state house correspondents on the details of the 2022 budget proposal, Ahmed made this revelation.
According to Zainab, the federal government is borrowing to fund development projects including as roads, trains, bridges, power, and water in order to ensure the country’s long-term sustainability.
She stated that the government would fund the N6.258 trillion debt problem with new borrowings of N5.012 trillion (of which domestic borrowings are N2.506 trillion and foreign borrowings are N2.506 trillion), project-tied multilateral/bilateral loans of N1.156 trillion, and privatization proceeds of N90.73 billion.
“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.
So, we need to borrow to be able to build these projects that will ensure that we’re able to develop on a sustainable basis.
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 at July 2021, the total borrowing is 23 percent of GDP. When you compare it to other countries, we are the lowest within the region, lowest compared to Egypt, South Africa, Brazil, Mexico, and Angola.
We do have a problem with revenue. Our revenues have been increasing. We just reported to the council that our revenues from non-oil have performed (as at July) at the rate of 111 percent, which means outperforming the prorated budget.
But our expenditure, especially staff emoluments have been increasing at a very fast rate making it difficult to cope with funding of government.
So, what we have to do is a combination of cutting down our cost, as well as increasing revenue to be able to cope with all that is required for the government to do, including salaries, pensions debt service, as well as capital expenditure.”she said
On Thursday, 7th October, Buhari is set to present the budget to the national assembly.