Zainab Ahmed, minister of finance, budget and national planning, says the federal government will borrow to finance N6.258 trillion deficit in the 2022 budget.

Ahmed made this disclosure while briefing State House correspondents on the details of the 2022 budget proposal.

The finance minister argued that the government is borrowing to provide developmental projects — roads, rails, bridges, power and water for sustainable development in the country.

She said the government would finance the N6.258 trillion deficit by new borrowings of N5.012 trillion (of which domestic — N2.506 trillion and foreign — N2.506 trillion) from project-tied multilateral/bilateral loans — 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,” she said.

“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.”

President Muhammadu Buhari is expected to present the budget to the National Assembly today.

The Cable