Economy

How we are going to finance fresh N10.78 trillion borrowing – Buhari

Published

2 years ago

October 7, 2022

President Muhammadu Buhari on said his government is going to finance the N10.78 trillion deficit in the 2023 budget by borrowing N8.80 trillion and N206,18 billion from privatisation proceeds..

The president, while presenting the 2023 budget of N20.51 trillion, to the National Assembly said his government expected the total fiscal operations of the Federal Government to result in a deficit of N10.78 trillion..

“This represents 4.78 percent of estimated GDP, above the 3 percent threshold set by the Fiscal Responsibility Act 2007. As envisaged by the law, we need to exceed this threshold considering the need to continue to tackle the existential security challenges facing the country..

“We plan to finance the deficit mainly by new borrowings totalling 8.80 trillion Naira, 206.18 billion Naira from Privatization Proceeds and 1.77 trillion Naira drawdowns on bilateral/multilateral loans secured for specific development projects/programmes..

“Over time, we have resorted to borrowing to finance our fiscal gaps. We have been using loans to finance critical development projects and programmes aimed at further improving our economic environment and enhance the delivery of public services to our people,” he said..

Buhari added that the nation had witnessed two economic recessions within the period of his administration, saying a direct result of this was the significant decline in the nation’s revenue generating capacity..

“In both cases, we had to spend our way out of recession, resulting in higher public debt and debt service. It is unlikely that our recovery from each of the two recessions would have been as fast without the sustained government expenditure funded by debt,” he explained.