Buhari Proposes Spending 16.39 Trillion Naira in 2022

Buhari Proposes Spending 16.39 Trillion Naira in 2022

By Bashir Olanrewaju

Nigerian President Muhammadu Buhari tabled proposals to lawmakers today in Abuja to spend 16.39 trillion naira in 2022.

The spending plans are based on an oil price of 57 dollars a barrel, output of 1.88 million barrels a day and an exchange rate of 410.15 Naira to a dollar.

The budget will be partly financed through deficit spending of 6.26 trillion naira, representing 3.39 percent of the gross domestic product and higher than the 3 percent cap set under the Fiscal Responsibility Act of 2007.

President Buhari

“We need to exceed this threshold considering our collective desire to continue tackling the existential security challenges facing our country,” Buhari said.

The deficit will be covered by fresh loans of 5.1 trillion naira, the proceeds of privatization of some state-owned companies to the tune of 90.73 billion naira and 1.16 trillion naira to be taken from funds already borrowed for development projects, he said.

The new loans will add to Nigeria’s existing debt burden of about 85 trillion naira. Buhari acknowledged the concern of many Nigerians at the rising debt burden but said the borrowings remain within sustainable limits.

Less than a third of the proposed spending, 5.35 trillion naira, will go to capital projects, 3.61 trillion Naira will go toward servicing existing debt, while a “sinking fund” of 292.71 billion will be created to retire maturing bonds. The rest will go to recurrent spending.

Buhari sees inflation averaging 13 percent during 2022, with the GDP growing 4.2 percent.