‘Nigeria To End 2022 With N12.6trn Deficit’
The Group Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu has projected that Nigeria may end 2022 with N12.6trillion deficit
He noted that with narrow expectation of revenue generation, the federal government’s projection of increasing revue in 2022 is not attainable and would further cause a wider budget deficit.
He said this yesterday at the bi-monthly forum of the Finance Correspondents Association of Nigeria (FICAN), held in Lagos with the theme: “Foreign Direct Investment: Review of 2021 Performance, Implications and Outlook for 2022.”
He noted that Investors are interested in large and skilled labour market, relatively free labour of less union and government control.
According to him: “As at November 2021, the minister of finance said federal government revenue was N5.5trillion and that was 11 months. If you consider that on monthly basis, it means we generate N500billion every month. If you use that at the end of 2021, the federal government generated N6trillion as revenue.
“The budgeted expenditure last year was N14trillion. What that means is that we have an effective budget deficit of N8trillion last year. This year, we have budgeted to generate N10.1 trillion and we have budgeted expenditure of N17.1 trillion and budgeted N6.99trillion as deficit.
The government said we going to add about N2.55trillion to sustain the payment of subsidy in 2022 alone.
“If you added that N2.55trillion to N17.1 trillion we are going to have N19.6trillion but the government said they will generate N10trillion. If they achieve their budgeted revenue expectation, we are going to have N9.6trillion deficit. Nothing has changed in the economy structurally as to enable us to generate from N6trillion to N10trillion.
“If we give it a benefit of doubt and increased government revenue to N7trillion and you spent N19.7trillion. Go and note it that Johnson Chukwu said it that we are going to end 2022 with N12.6tillion deficit.
“So, what follows next is that we will have to borrow. The Monetary Policy Rate is 11.5 per cent and so they are giving 13.5 per cent to Central Bank of Nigeria (CBN) to be borrowing.”
He noted that the nation’s interest charge is overblown, attributing Nigeria’s economic woos to leadership.