President Muhammadu Buhari has in a written communication to the House of Representatives, formally sought for an increase in the 2022 budget deficit to be financed through borrowing from the domestic market.
In a letter sent to the House of Representatives and read by the speaker, Femi Gbajabiamila, on Thursday, April 7, 2022, President Buhari said the total budget deficit is projected to increase by N965.42 billion to N7.35 trillion, representing 3.99% of GDP.
He said the incremental deficit will be financed by new borrowings from the domestic market. The President also requested the review of the 2022 Medium-Term Expenditure Framework (MTEF), upon which the budget was hinged.
“As you are aware, Mr Speaker, the new development both in the global economy as well as the domestic economy has necessitated the revision of the 2022 fiscal framework on which the 2022 budget was based. The total budget deficit is projected to increase from N965.42 billion to N7.35 trillion, representing 3.99 percent of the GDP.
“The increment of the deficit will be financed by new borrowings from the domestic market.
“Given the urgency of the request for revision of the 2022 fiscal framework and 2022 budget amendment, I seek the corporation of the National Assembly for expeditious action on this request” the letter read in part.”
The President’s request has been sent to the house committee on finance for further legislative action.
The move which will further add to Nigeria’s already huge debt profile is coming a few days after the Debt Management Office (DMO) released a schedule of the Federal Government’s N720 billion domestic borrowing plan for the second quarter of 2022.
The DMO said that it would on April 25 open a new, 2032 FGN bond, valued at between N70billion to N80billion, with a tenor of 10 years. The bond is expected to have an interest rate of 13% per annum.
