The Federal Executive Council, FEC, Wednesday approved the 2022 – 2024 Medium Term Expenditure Framework and the Fiscal Strategy Paper (MTEF & FSP) authorizing the funding of a N5.26 trillion budget deficit through borrowings.
The Council also approved N16. 041 billion for erosion control contracts under Ecological Fund which cuts across many states.
The Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed, disclosed this while briefing State House correspondents at the end of the weekly council meeting presided over by President Muhammadu Buhari at the First Lady’s Conference Room, presidential villa, Abuja.
The Minister said her ministry presented a memo to FEC with a 2022 projected revenue of N6.54 trillion and N2.62 trillion to accrue to the Federation Account and the Valued Added Tax, VAT, respectively. She said this revenue is projected to increase in 2023 to 9.15 trillion. Mrs. Ahmed explained that the MTF FSP describes the federal government’s socio-economic and developmental objectives and priorities for the reporting period of 2022 to 2024 as well as the fiscal strategies to be put in place, and policies to achieve in the priorities.
Ahmed stated that the report to council highlighted the key drivers of government’s revenue and the spending plans.
According to her, “The goal for us is to improve the nation’s macroeconomic situation or reposition the economy on the path of inclusive diversified as well as sustainable. The MTF FSP consists of medium term macro economic projections, fiscal targets and estimates of revenue and expenditure including government’s financial obligations.
“We have also presented to the federal government the projected revenues for the 2022 to 2024. Specifically for 2022.
“The revenue that we expect is 6.54 trillion and 2.62 trillion to accrue to the Federation account on VAT respectively. And then there will be a net oil and gas revenue available for the Federation account account FAAC for distribution will be 6.15 1 trillion in 2022.
“This revenue is projected to increase in 2023 to 9.15 trillion. The total expenditure that we are expecting we have projected and approved by Council is an aggregate expenditure of 13.98 trillion Naira. This includes 1.1 trillion Naira of government owned enterprises expenditure as well as grants and donor funds donor funded projects in the sum of 62.24 billion.
“This means that this budget is just 3% higher than the 2021 budget in terms of the size of expenditure.
“We also reported to council the budget deficit and the financing items for the expenditure. The budget deficit that is projected for 2022 is 5.62 trillion, up from 5.60 trillion in 2021. This amount represents 3.05 percent of the estimated GDP (Gross Domestic Products) , which is slightly above the three percent threshold that is specified in the fiscal responsibility, Act.
“The FRA (Fiscal Responsibility Act) empowers Mr. president to exceed the threshold in his opinion, the nation faces national security threats. And it is our opinion on fact agreed that we can exceed.
“The deficit is going to be financed by new foreign borrowing and domestic borrowing, both domestic and foreign in the sum of 4.89 trillion on privatization proceeds of 90.73 billion and drawdowns from existing project tied loans of 635 billion.