The Centre for the Promotion of Private Enterprises (CPPE) has projected that the ambitious budget size of N17.1 trillion and the unpredictable revenue outlook will elevate the risk of higher fiscal deficit than projected.
It said this has implications for macroeconomic outcomes of high fiscal deficits, a new round of monetisation of the deficit, pressures on the exchange rate and the general price level. CPPE Chief Executive Officer, Dr. Muda Yusuf, made the statement in its outlook for the economy in 2022, which it said is largely positive.
He also noted that the pressure of debt service on government finances will persist in 2022 and beyond. “The 2022 budget provided for the sum of N3.88 trillion as debt service.
This is a substantial amount when compared with the capital budget provision of N5.46 trillion. Debt service payment is typically a first line charge in budget releases.”
This was even as the centre noted that the economic players will grapple with a number of headwinds in 2022. According to the centre, these have macroeconomic, policy, regulatory, structural and security dimensions.
