President Muhammadu Buhari has said Nigeria had to borrow funds in order to exit the two recessions recorded under his administration.
President Buhari said this during the presentation of the 2022 Appropriation Bill of N16.39 trillion to a joint session of lawmakers at the National Assembly in Abuja on Thursday.
According to him, what necessitated the borrowings was the economic recession that hit the country.
He said, “As you are aware, we have witnessed two economic recessions within the period of this administration. In both cases, we had to spend our way out of recession, which necessitated a resort to growing the public debt.
“It is unlikely that our recovery from each of the two recessions would have grown as fast without the sustained government expenditure funded by debt.”
The president also addressed the concerns by some Nigerians regarding borrowing, saying they have every right to ask questions about the Federal Government’s growing debt profile
He, however, insisted that the debt level of his regime was within sustainable limits.
“Some have expressed concern over our resort to borrowing to finance our fiscal gaps. They are right to be concerned.
“However, we believe that the debt level of the Federal Government is still within sustainable limits. Borrowings are targeted at specific strategic projects and can be verified publicly.”
The oil benchmark for the 2022 appropriation is $57 per barrel, while the exchange rate is N410.5 per dollar in the budget proposal tagged: “Budget of Economic Growth and Sustainability.”
The budget is projected to stimulate GDP growth by 4.2 per cent, while inflation rate is put at 13 per cent.
It is projected oil production will be at 1.88m barrels per day including condensates, while budget deficit is estimated at N6.23 trillion.
President Buhari said: “Distinguished Members of the National Assembly, the 2022 to 2024 Medium Term Expenditure Framework and Fiscal Strategy Paper sets out the parameters for the 2022 Budget as follows:
“Conservative oil price benchmark of 57 US Dollars per barrel;
“Daily oil production estimate of 1.88 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day); Exchange rate of four 410.15 per US Dollar; and projected GDP growth rate of 4.2 per cent and 13 per cent inflation rate.
“Based on these fiscal assumptions and parameters, total federally-collectable revenue is estimated at 17.70 trillion Naira in 2022.
“Total federally distributable revenue is estimated at 12.72 trillion Naira in 2022 while total revenue available to fund the 2022 Federal Budget is estimated at 10.13 trillion Naira. This includes Grants and Aid of 63.38 billion Naira, as well as the revenues of 63 Government-Owned Enterprises.
“Oil revenue is projected at 3.16 trillion, Non-oil taxes are estimated at 2.13 trillion Naira and FGN Independent revenues are projected to be 1.82 trillion Naira.
” A total expenditure of sixteen point three-nine (16.39) trillion Naira is proposed for the Federal Government in 2022 or the economies to survive and thrive.”