The Federal Executive Council (FEC) has approved the 2022 – 2024 Medium Term Expenditure Framework and the Fiscal Strategy Paper (MTEF & FSP), which allows the funding of a N5.62 trillion budget deficit through borrowings and revenues from privatised assets.
The Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, disclosed this Wednesday while briefing State House reporters after the federal cabinet meeting presided over by President Muhammadu Buhari.
She said her ministry presented a memo to FEC with a 2022 projected revenue of N6.54tr and N2.62tr to accrue to the Federation Account.
The minister said the budget deficit projected for 2022 is N5.62tr, up from N5.60tr in 2021. This amount represents 3.05 percent of the estimated GDP, which is slightly above the 3% threshold that is specified in the Fiscal Responsibility Act.
“The deficit is going to be financed by new foreign borrowing and domestic borrowing, both domestic and foreign in the sum of N4.89tr; on privatisation proceeds of N90.73bn and drawdowns from existing project tied loans of N635bn.”
“The revenue that we expect is N6.54tr and N2.62tr to accrue to the Federation account on VAT respectively. And then, there will be net oil and gas revenue available for the Federation account FAAC for distribution will be 6.15 1tr in 2022.
“This revenue is projected to increase in 2023 to N9.15tr. The total expenditure that we are expecting we have projected and approved by Council is an aggregate expenditure of N13.98tr. This means that this budget is just 3% higher than the 2021 budget in terms of the size of expenditure.”
She also said the Nigerian economy has recovered from a negative growth of minus 1.8% in 2020to 2.5%.
“What is interesting is that the non-oil GDP continues to grow at N169.69tr compared to all GDP of 14.8tr included in the nominal GDP. I beg your pardon, nominal consumption is 130 49.36bn.”