Nigeria cites “threat to national security” to violate budget deficit limits

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Nigeria’s budget deficit is expected to decrease from N 5.60 trillion in 2021 to N 5.62 trillion in 2022. Zainab Ahmed, Minister of Finance, Budget and National Planning, Said.

Ms Ahmed briefed state lawmakers in a briefing after a Federal Executive Council meeting in Abuja on Wednesday.

The minister explained that the budget deficit represents 3.05% of estimated GDP, just above the 3% threshold specified in the Fiscal Responsibility Law.

“The FRA empowers the president to cross the threshold if his opinion indicates that he faces a threat to national security, and that is our opinion, and the FEC we have agreed that we can go beyond,” said she declared.

In recent years, financing Nigeria’s deficit has been a concern for Nigerian policymakers and international rating agencies.

Ahmed said the deficit will be covered by a total of 4.89 trillion Newtons of new foreign and domestic borrowing, 90.73 billion Newtons of privatization revenues and 635 billion Newtons of debt levies on existing projects.

Medium-term framework

The minister further explained that the ministry has presented notes for approval of the medium-term expenditure framework from 2022 to 2024 and budgetary strategic documents required by the law on fiscal responsibility.

The MTEF / FSP describes the socio-economic and development objectives and priorities of the federal government, the financial strategies implemented and the policies to achieve these priorities for the reference period 2022-2024.

The report highlights the main drivers of the government’s revenue and expenditure plans, with the aim of improving the country’s macroeconomic situation and putting the economy back on a path of global, diversified and sustainable growth. I added.

“The MTEF / FSP consists of revenue and expenditure estimates, including medium-term macroeconomic forecasts, financial targets and government financial obligations,” she said.

“We provided the board with a macroeconomic basis that defined the quotes presented to the board. “

Economy

Speaking on the economy, the minister said the Nigerian economy has recovered from negative growth of -1.8% in 2020, 2.5% in 2021 and 4.2% in 2022. She added that inflation had slowed from a two-month high. It is now moderate and has dropped to 17.93%.

However, she added that foreign exchange reserves declined compared to the previous month.

“The main macroeconomic assumptions presented after approval by the Council are: Inflation at US $ 1 in 2022 is 13% and nominal GDP is $ 149.369 billion,” she said.

“It is interesting to note that the non-oil GDP continues to grow to 169.690 billion dollars, against 14.680 billion oil GDP in nominal GDP. Nominal consumption is 130,493.6 billion.

“We have also presented the federal government with projected revenues from 2022 to 2024. Particularly for 2022, we are forecasting revenues of N 6.54 trillion and N 2.62 trillion for federal accounts and VAT, respectively. The net oil and gas revenues that the FAAC can distribute will reach 6.151 trillion Newtons in 2022, and are expected to increase to 9.15 trillion Newtons in 2023. “

The minister said the total planned and approved spending by the council was N 13.98 trillion in total spending.

“This includes spending for 1.1 trillion Nyra state-owned enterprises and a total of 62.24 billion Nyra grants and donor-funded projects,” she said.

“This means that this budget is only 3% larger than the 2021 budget in terms of the size of spending.”

Regarding the debt-to-income ratio expected from the report, the minister said it was 43%, adding that all Nigerians are concerned about this number.

“The actual debt-to-income ratio in 2019 was 58%, so this is an improvement over 2019,” she said.

“In 2020, this ratio reached 85%. Therefore, 2022 is a significant improvement over 2020. ”

She further explained that the country is optimistic about growth after being hit. COVID-19 Pandemic About the Global Economy.

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Source Link Nigeria Cites “National Security Threat” to Violate Budget Deficit Limits


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