ABUJA, Reuters – Nigeria’s president has unveiled a record 16.39 Trillion Naira (39.8 Billion) budget for 2022. The projected 25 percent increase in government spending is expected as the economy grapples with the impacts of the pandemic.

Muhammadu Buhari, Africa’s top oil exporter and most populous nation, stated that crude oil production would be 1.88 million barrels daily and that oil prices would average $57 per barrel.

He told both houses that the deficit would reach 6.26 trillion Naira or 3.39 percent of GDP.

“Some people have voiced concern about the use of borrowed money to pay for our fiscal gap. These are valid concerns. He said that we still believe the Federal Government’s debt levels are within acceptable limits.

He said, “It’s unlikely that our recovery after each of these recessions would have been as rapid without sustained government spending funded by debt,” and he was referring to both the 2016 recession and the 2020 crisis caused by COVID-19.

Buhari confirmed previously published projections of 2.2% GDP growth for 2022 and a 13% inflation forecast.

Buhari stated that “our medium-term goal is to increase our revenue-to-GDP ratio, from approximately 8 percent now to 15 percent in 2025.”

“At that level of revenues, the Debt-Service-to-Revenue ratio will cease to be worrying. Simply put, there is no debt sustainability issue. However, revenue challenges are something we have to solve in order to keep our debts sustainable.

Since Buhari assumed office in 2015 Nigeria has seen record spending, however the budget has been difficult to pay for due to the low income. The revenue problem has been exacerbated by the pandemic.

After expanding by 5% during the second quarter, it is expected to expand by as much as 3% in this year’s economy. The pandemic caused it to contract in 2020. However, the economy managed to escape recession in the fourth quarter. But, growth is still fragile.

($1 = 412.0000 naira)