The Federal Government plans to borrow about N4.89tn from internal and external sources to finance the deficit in its proposed 2022 budget of N13.98trn due to dwindling revenue.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, made this known in Abuja on Monday at an interactive session organised by the House of Representatives’ Committee on Finance on the 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper.
Ahmed noted that perception of the naira as being over valued over despite recent the adjustment by the Central Bank of Nigeria has compounded Nigeria’s risk aversion in the global capital market, which she said would further put pressure on the foreign exchange market, stressing that foreign portfolio investors have yet to return to the Nigerian market.
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The minister stated that while the government plans to borrow to fund the N5.62tn deficits in 2022, it will reduce capital expenditure by N259.315bn, as the reduction would become necessary due to economic volatility occasioned by unstable global oil market as well as the effects of the COVID-19 pandemic.
Ahmed said for capital expenditure next year, ministries, departments and agencies would get N1.76tn as opposed to the N2.02tn spent in 2021.
She also the exchange rate has been pegged at N410.15 to a dollar per dollar and oil benchmark at $57 per barrel.
Other key macro-economic assumptions in the MTEF/FSP include a crude oil benchmark crude oil production of 1.88 million barrels per day, an inflation rate of 13 per cent, and a nominal GDP of 149.369tn.
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