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Plans are underway by the Federal Government to remove subsidies on petrol and electricity come 2022.
The Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed, stated this to newsmen in Abuja.
Mrs. Ahmed, who disclosed while giving a full breakdown of the 2022 budget, explained that the removal of subsidies was part of the overall step at addressing revenue leakages.
Overall, budget deficit is N6.26 trillion for 2022. This represents 3.3 per cent of Gross Domestic Product (GDP).
The Minister hinted that the budget deficit would be financed mainly by borrowings, adding that the sum of N2.51 trillion would be sourced domestically while foreign sources would be N2.51 trillion.
She said that multi-lateral/bilateral loan drawdowns stand at N1.16 trillion, while privatisation exercise was expected to yield N907.7 billion.
The Minister hinted that the government has had to resort to borrowing to finance the fiscal gaps, but was quick to add that the Federal Government believes that its debt level is still within sustainable limits.
“Borrowings are essentially for capital expenditure and human development as specified in Section 41(1) a of the Fiscal Responsibility Act 2007. Having witnessed two economic recessions, we have had to spend our way out of recession, which contributed significantly to the growth in the public debt. It is unlikely that our recovery from each of the two recessions would have been as fast without the sustained government expenditure funded partly by debt,” she said.
While arguing that the challenge confronting Nigeria currently was not wholly a debt issue, she noted that the inability of the country to generate enough revenue to fund its development activities such as building infrastructure and funding social sectors was the real challenge.
