President Muhammadu Buhari has forwarded the 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) to the National Assembly.
The president, in a letter to the House of Representatives, on Thursday, commended the lawmakers for the sustained January-December budget cycle.
Mr Buhari said the government would use the MTEF parameters to prepare the 2022 budget, adding that it (MTEF) was submitted early enough to ensure prompt passage of the budget.
The Federal Executive Council (FEC) approved the MTEF and FSP on Wednesday.
The Minister of Finance and National Planning, Zainab Ahmed, who briefed journalists at the State House, said the government was projecting revenue of N6.54 trillion and N2.62 trillion to the Federation Account and Value Added Tax (VAT) respectively.
The projected expenditure stands at N13.98 trillion with a deficit of N5.62 trillion. For two years in a row, the deficit is above the deficit to GDP threshold stipulated in the Fiscal Responsibility Act.
The Fiscal Responsibility Act stipulates three per cent threshold, however, the president can increase it with a proper justification to the National Assembly.
Mrs Ahmed had said the “The FRA 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 N4.89 trillion on privatisation proceeds of N90.73 billion and drawdowns from existing project tied loans of N635 billion.”
Some of the parameters, according to the minister, include “crude oil benchmark price of 57 dollars per barrel of crude oil for 2022, a crude oil production of 1.88 million barrels per day, and our exchange rate of 410 to one US dollar, an inflation rate of 10 per cent in 2022, and a nominal GDP of N149.369 trillion.”
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