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FG announces fresh plan of borrowing to fund 2022 budget

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Minister of Finance, Budget and National Planning, Zainab Ahmed

The federal government has announced a new plan of borrowing more to fund its budget for 2022 and spend more to service the growing debts as a result.

The Ministry of Finance, Budget and National Planning, the Debt Management Office and the Budget Office of the Federation made this known at a public hearing organised by the House of Representatives’ Committee on Finance in Abuja on Monday.

The committee had organised the stakeholders’ meeting on the 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper, with which the 2022 Appropriation Bill would be designed.

Commenting on some of the points in the presentation earlier made by the Minister of Finance, Budget and National Planning, Zainab Ahmed, the Director-General, DMO, Patience Oniha, said that the debt stock would keep increasing as revenue is declining.

Oniha said: “I think one of the things that have come out from the presentation from the honourable minister is, much as we have been conservative in projecting revenues, we still see that we are underperforming in revenue.

“So, it means that we are relying increasingly on borrowings to finance the activities of the government. And if you look at the figures from last year when the budget was revised because of COVID-19, we can see that the borrowing levels are going higher.

“So, what that means is that the debt stock as expected will keep rising and debt service will also keep increasing, as shown in the presentation. I just thought I should highlight that this is primarily where the debt stock is growing from, and the debt service, which means that we are also servicing, taking from the revenue which has not grown as expected. I thought I should highlight that because there is a lot of concern about debts. But really, this is the source and we can see the trend.

On his part, the Chairman of the committee, James Faleke, noted that the regime led by President Muhammadu Buhari had been widely criticised over its borrowing spree.

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Faleke said: “It is important that I ask that question because Nigerians just believe that we are borrowing, borrowing and borrowing; some even said we might even be speaking Chinese. But it is good that you (Oniha) have cleared the air.” 

Similarly, the Director-General, Budget Office of the Federation, Ben Akabueze, also noted that the country was spending more than it earns, which leaves borrowing inevitable.

Akabueze said: “As the honourable minister highlighted in her presentation, as of June, in terms of revenue performance, our non-oil tax revenues were running ahead of or very close to target.

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“But our oil revenue performance was a drag – just under 50 per cent of target. That pulled down our overall revenue performance percentage.”

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