Buhari writes to National Assembly asking to borrow an extra $1.8bn to fund supplementary budget

PRESIDENT Muhammadu Buhari has written to the House of Representatives asking it to approve a N819.5bn ($1.82bn) supplementary budget for the remainder of 2022 which shall be funded through increased borrowing.

In December last year, President Buhari signed the 2022 Appropriation Bill with aggregate expenditure of N17.127trn ($41.55bn) into law. However, since the outbreak of the coronavirus pandemic, about a third of the Nigerian budget has been funded through borrowing due to the collapse on global commerce.

Like most African nations, Nigeria relies on the export of primary products to fund her budget and with sales down, international lenders had to offer loans to bridge the funding deficit.  In a letter read by House of Representatives speaker Hon Femi Gbajabiamila yesterday, President Buhari said the 2022 budget deficit will be financed with new domestic borrowing.

He noted that if the supplementary budget is approved, it will take a total deficit in 2022 to N8.17trn. In his letter, President Buhari explained that the country decided to explore a supplementary budget because of the impact of flood and the need to complete major roads that are at 85% completion.

His letter read: “The president writes that 2022 has witnessed the worst flood incident in recent history which has caused massive destruction of farmlands at a point already close to harvest season. This may compound the situation of food security and nutrition in this country.

“The floods also devastated the road infrastructure across the 36 states and the Federal Capital Territory. It has affected several sections of major roads and bridges nationwide that are critical to the movement of goods and services. Also, the water sector was equally affected by the floods and there is a need to complete some ongoing projects that have achieved 85% completion across the country.”

In another letter, President Buhari also informed the lawmakers that the government will take another N1trn loan from the Central Bank of Nigeria (CBN) through ways and means. He said the additional N1trn will take the total obligation to CBN to N23trn, which the government seeks to convert to bonds.