Nigeria’s federal government, Wednesday, approved N16.39 trillion as its spending plan for 2022. Under the 2022 Appropriation Bill, President Muhammadu Buhari is expected to present a budget-deficit-estimate of N6.258 trillion, to be financed by additional borrowing.
Nigeria’s total public debt stock currently stands at N35.5 trillion as at June 30, 2021. This comprises total domestic debt of N21.8trillion and total external debt of N13.7 trillion.
Briefing State House correspondents after the meeting of the Federal Executive Council, yesterday, Mrs. Zainab Ahmed, minister of finance, budget and national planning, said that further borrowing was necessary to fund developmental and infrastructure projects, since collectible federal revenue was insufficient.
Mrs Ahmed said: “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% of GDP.
”When you compare our borrowing to other countries, we’re the lowest within the region, lowest compared to Egypt, South Africa, Brazil, Mexico, the very lowest, and Angola.
The key assumptions and targets underlying the budget provisions are: oil price at $57 per barrel; oil production at 1.88 mbpd; exchange rate at N410.15/US$; oil revenue at N3.15 trillion; and non-oil revenue at N2.13 trillion.
Then, there is Federal Government’s independent revenue of N1.82 trillion; total projected Federal Government revenue of N10.13 trillion; debt servicing of N3.61 trillion; statutory transfers of N768.28 billion (including N462.53 billion capital component) and personnel costs and pensions of N4.69 trillion; (inclusive of N617.72 billion for the 63 GOEs).
Others are overhead costs of N792.39 billion (inclusive of N451.0 billion for the 63 GOEs); and capital expenditure (inclusive of capital component of Social Investment Programme, capital in Statutory Transfers, capital of 63 GOEs, Capital Supplementation as well as Grants and Donor funding) of N5.35 trillion(inclusive of N647.08 billion for the 63 GOEs – General Operating Expenses).