Zainab Ahmed, Nigeria’s finance minister, has revealed that 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.
She made this known in Abuja on Monday at an interactive session organized 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 overvalued despite the recent adjustment by the Central Bank of Nigeria has compounded Nigeria’s risk aversion in the global capital market.
She said that this act 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 the 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.
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She also stated that the exchange rate has been pegged at N410.15 to a dollar per dollar and the oil benchmark at $57 per barrel.
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