President Muhammadu Buhari has presented to the Senate for approval a borrowing plan of N4.89 trillion to fund the N5.62 trillion budget deficit for next year, increasing the country’s overall debt to N38 trillion.
The nation’s current debt profile stands at N33.1 trillion as at March 31.
The fresh borrowing plan is contained in 2022-2024 Medium Term Expenditure Frameworks (MTEF) and Fiscal Strategy Paper (FSP) forwarded to the Senate by President Buhari for approval and set for passage on Thursday
Before forwarding the request to Senate for approval, the Federal Executive Council (FEC) deliberated on the document last week Wednesday putting and accepted the budget proposal of N13.98trillion for next year with N9.16 trillion as projected revenue generation while the deficit of N5.26 trillion will be covered up with loans.
Explaining to journalists, Minister of Finance, Budget and National Planning Zainab Ahmed explained that the goal is to improve the nation’s macro-economic situation and also reposition the economy on the path of inclusive diversified as well as sustainable.
She said, “The MTF FSP consists of medium-term macro economic projections, fiscal targets and estimates of revenue and expenditure including government’s financial obligations.
“We have also presented to the federal government the projected revenues for the 2022 to 2024 specifically for 2022.
“The revenue that we expect is 6.54 trillion and 2.62 trillion 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 N6.15 1 trillion in 2022.
“This revenue is projected to increase in 2023 to N9.15 trillion. The total expenditure that we are expecting we have projected and approved by Council is an aggregate expenditure of N13.98 trillion which includes N1.1 trillion of government owned enterprises expenditure as well as grants and donor funds donor funded projects in the sum of 62.24 billion.
“This means that this budget is just 3% higher than the 2021 budget in terms of the size of expenditure. We also reported to council the budget deficit and the financing items for the expenditure.
“The budget deficit that is projected for 2022 is 5.62 trillion, up from 5.60 trillion in 2021. This amount represents 3.05% of the estimated GDP, which is slightly above the 3% threshold that is specified in the Fiscal Responsibility Act.”
Upon receiving the document the strength of Order 1(b) of the Senate Standing Rules, Senate Leader Yahaya Abdullahi moved a motion for consideration of the request immediately by forwarding it to relevant committees for required legislative inputs and submission of report Thursday.
Upon secondment of the motion by Senate Minority Leader Enyinnaya Abaribe (PDP Abia ), Senate President Lawan put it to voice votes with the Ayes having it.
Accordingly, Lawan referred the documents to Senate joint Committees on Finance, National Planning, Banking, Petroleum (Upstream), Petroleum (Downstream) and Foreign and Local Debts for required consideration at the committee level.
“This is an important request from the President that must be considered and approved before we proceed on long recess Thursday this week.
“Therefore, the joint committee which is to be led by the Committee on Finance should use Tuesday and Wednesday to work on the request and submit report for final consideration and approval on Thursday,” he said.
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