President Muhammadu has justified his quest for more financial borrowings, saying that the debt of the federal government was within sustainable limits.
He said that the borrowings are tied to specific strategic projects.
Buhari’s justification of the borrowings was contained in his 2022 budget presentation speech before a joint session of the National Assembly.
Recall that the federal government had come under hard criticisms over its decision for more borrowings.
The President however noted the concerns, saying projects for which the funds were secured could be publicly verified.
Similarly, the President added that the deficit arising from the N16.39 trillion 2022 budget will be financed by new borrowings.
He said: “We plan to finance the deficit mainly by new borrowings totalling 5.01 trillion Naira, 90.73 billion Naira from Privatization Proceeds and 1.16 trillion Naira drawdowns on loans secured for specific development projects.
“Some have expressed concern over our resort to borrowing to finance our fiscal gaps. They are right to be concerned. However, we believe that the debt level of the Federal Government is still within sustainable limits. Borrowings are to specific strategic projects and can be verified publicly.
“As you are aware, we have witnessed two economic recessions within the period of this Administration. In both cases, we had to spend our way out of recession, which necessitated a resort to growing the public debt. It is unlikely that our recovery from each of the two recessions would have grown as fast without the sustained government expenditure funded by debt.”
– Parrot Nigeria