The Federal government has defended the 2021 budget deficit which has exceeded the Fiscal Responsibility Act by threshold of three per cent.
President Muhammadu Buhari had presented a budget proposal of N13.08trn up by 22.9 per cent from the N10.8trn 2020 budget, with revenue projected at N7.5trn.
The budget deficit is projected to grow by N5.21trn made up of Government Owned Enterprises and project-tied loans thus representing 3.64 percent of the budget size.
The N5.21trn budget deficit exceeds the three per cent threshold prescribed by the FRA 2007 for the annual budget.
Speaking on Tuesday during the public presentation of the 2021 budget, Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said that although the 2021 budget deficit exceeded the three per cent threshold, the government has not breached the law.
She said that there is a provision in the Fiscal Responsibility Act that allows the government to surpass the threshold during “unusual times.”
The minister also revealed that Nigeria will not apply for relief to get out of its crippling N31 trillion debt burden.
The International Monetary Fund (IMF) is pushing debt relief for low income countries.
Responding to a question whether Nigeria would take the option of the debt relief, Ahmed said the government was not considering such at this time.
She said several loan agreements have been entered with various lenders, adding asking for debt relief would portend Nigeria as a country that cannot repay its indebtedness in the eyes of creditors.
The Minister also defended the 2021 budget deficit which has exceeded the Fiscal Responsibility Act threshold of three percent.