Nigeria’s budget deficit has risen from N1.847 trillion to N4.563 trillion, it was learnt on Monday.
The deficit figure captured in the original 2020 budget before its downward review was N1.847 trillion. It has gone up N4.563 trillion in the revised appropriation now awaiting National Assembly consideration and approval.
The Director-General of the Debt Management Office (DMO), Ms. Patience Oniha, dropped the hint during her presentation before the Senate Committee on Foreign and Local Debt considering President Muhammadu Buhari’s $5.513 billion external loan request.
Ms. Oniha said that the revised 2020 budget proposal is N10.509 trillion with a deficit of N4.563 trillion.
She said that the deficit would be financed through domestic borrowing of N2.188 trillion and external borrowing of N1.984 trillion making a total of N4.173.560 trillion.
She noted that the amount projected in this year’s appropriation was N1.594.986 trillion.
She said the increase in the New Borrowing for 2020 is due to the increase in the Deficit in the Budget from N2.18 trillion to N4.58 trillion.
Oniha explained: “The revision of the 2020 Budget became necessary due to the effects of COVID-19 on Nigeria’s Revenues and the need for new (previously unbudgeted) spending on health to meet the health challenges occasioned by COVID-19.
“The subsisting 2020 Appropriation Act had a total expenditure of N10.594 trillion and a deficit of N2.175 trillion to be part financed through New Domestic Borrowing of N744.98 billion and new external borrowing of N850 billion.
“The N850 billion new external borrowing which was to be raised through Eurobonds has been converted, with the approval of the National Assembly, to domestic borrowing due to lack of access to the International Capital Market at this time. Thus, the Total New Borrowing which is all domestic is N1.594 trillion.
“The proposed new domestic borrowing of N2,188.83 trillion will be raised from the domestic market through the issuance of Federal Government of Nigeria Bonds (FGN Bonds), FGN Savings Bonds, Sukuk, Nigerian Treasury Bills and possibly, a Green Bond.
“As at May 29, 2020, a total of N1.319.99 trillion had been raised. There is also an on-going Offer for Sukuk of N150 billion.”
She said that the DMO expected to raise the balance of N868.89 billion which is N2.188 billion less the N1.319 billion, in the course of 2020.