Zainab Ahmed, Nigeria’s Minister of Finance, on Wednesday, blamed the country’s worsening budget deficit on the ongoing conflict in Ukraine.
Ms Ahmed who spoke at an IMF meeting in Washington DC on Wednesday said that the ongoing war in Ukraine triggered the country’s budget deficit to rise to 4.5 per cent of the country’s GDP from an initial 3.5 per cent.
“The war in Ukraine started and it worsened our situation. We have a deficit now that is about 4.5 per cent of GDP, when we started with a deficit of about 3.5 per cent,” the country’s finance minister said.
The minister’s remark comes just a week after the House of Representatives approved N4 trillion in funding for the fuel subsidy in 2022. This represents a N3.557 trillion increase over the N442.72 billion planned previously.
The approvals came in response to President Muhammadu Buhari’s call to parliament to make changes to the fiscal framework for the year 2022.
The president had in a letter to the Senate noted that an adjustment to the fiscal framework for 2022 became necessary due to new events in both the world and domestic economies.
He attributed the changes to rises in the market price of crude oil, which he said were a result of the Russia-Ukraine conflict.
The implication of the increased budget deficit in 2022 is that the government may end up spending less on capital projects and human capital which are critical in spurring economic growth and delivering jobs.
