Budget Deficit Rises By 370%, Hits N47tn Under Buhari
The Budget Office of the Federation, has said that the nation’s total budget deficit under the administration of President Muhammadu Buhari, is set to hit N47.43 trillion.
The budget data analysed by the Budget Office covered the actual budget deficits and projections for 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022, and 2023 fiscal years.
According to data, deficit financing has risen by 370.54 per cent from N2.41tn in 2016 to N11.34tn in 2023, adding that in Q3 and Q4 of 2015, total deficit financing amounted to N841.48bn, and rose to N2.41tn in 2016, N3.81tn in 2017, N3.65tn in 2018, N4.18tn in 2019, N6.59tn in 2020, N6.44tn in 2021.
The Budget office explained that while the total deficit for 2022 has not been released, it expects deficit to hit N8.17tn out of which N6.37tn had been spent as at November 30, 2022.
The Budget office also said that it anticipates a high deficit financing of N8.17tn for the 2023 fiscal year.
Between Q3, Q4 of 2015, 2016, 2017, 2018, 2019, 2020, the first three quarters of 2021, adding that in the first four months of 2022, the Federal Government spent N23.66tn on personnel costs, pensions, overhead costs, presidential amnesty programme, other service-wide votes, and special interventions just as it also spent N14.13tn on servicing domestic and foreign debts, as well as N10.47tn on capital expenditure.
Commenting on the development, an economic expert, Professor Akpan Ekpo, said the it showed that expenditure eclipsed the revenue, adding that they have to borrow, which is why there is a deficit.
He said; “They can’t raise enough domestic resources to finance spending. That gap is a deficit. Talking about GDP, by the rules, it should not be more than a certain percentage of GDP, but it has exceeded that.”
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, had disclosed that the government was struggling to raise revenue for its expenditure.
In a document titled ‘Public Consultation on the Draft 2023 – 2025 MTFF/FSP,’ Zainab Ahmed said; “Revenue generation remains the major fiscal constraint of the federation. The systemic resource mobilisation problem has been compounded by recent economic recessions.
“So, we need to borrow to be able to build these projects that will ensure that we are able to develop on a sustainable basis. Nigeria’s borrowing has been of great concern and has elicited a lot of discussions. But if you look at the total size of the borrowing, it is still within healthy and sustainable limits.”
This was as it was gathered from government data that the President Buhari-led administration may pass on $16.62bn Eurobond loan repayments to the next government and it is expected that the repayments will be made almost every year until about 2038, according to the public presentation of the approved 2023 budget by the Minister of Finance, Budget and National Planning.
This was as the document showed that repayment of $500m is expected in 2023 and $1.12bn in 2025 just as other payments include $1.5bn in 2027 and $1.25bn each year from 2028 to 2030
Similarly, there is also a $1bn repayment by 2031 and $1.5bn each between 2032 and 2033 while it is expected that $4.75bn would be paid from 2038 onward.
