The Nigerian government spent an average of 74 percent of its revenue on debt servicing in the first eight months of this year, the Minister of Finance, Budget, and National Planning has said.
Between January and August, the country generated total revenue of N3.9rn but spent N2.89tn on debt servicing within the period the Minister, Zainab Ahmed, disclosed during the public presentation and breakdown of the highlights of the 2022 appropriation bill held in Abuja on Friday.
President Muhammadu Buhari presented the budget to the National Assembly on Thursday.
Ahmed explained further that within the first seven months of the year, Nigeria’s total expenditure was N8.14tn out of which N2.88tn was utilised for debt servicing, N2.75tn was spent on overhead cost, with N1.75tn going to capital projects.
“For the 2021 performance, between January and August, revenue generated was N3.93tn which was 73 per cent of the prorated target. Out of this amount, CIT and VAT collections were N547.5bn and N235.7bn respectively representing 121 percent in the case of CIT and 148 percent in the case of VAT of the prorated target,” she said.
“Custom collections 338.6bn represents 99 percent of the prorated target. Other revenues amounting to N1.7tn of which the federal government independent revenue of N691.36bn while GEOs revenue was N873.5bn.
“On the expenditure side, N8.14tn representing 84 percent of the N9.71tn prorated expenditure from January to August has been spent.
“This performance includes expenditure estimates of Government Owned Enterprises (GEOs) but doesn’t include project tied loans
“Of the expenditure, N2.89tn was utilized for debt servicing, while N2.57tn was utilised for personnel cost including pension and gratuities. As of the end of August, N1.75tn has been expended for capital projects, of this amount, N1.723tn represents 81 percent of the aggregate provision for Ministries Department Agencies’ capital prorated, while N36.01bn is expenditure from GEOs.
“So the story here is that the revenue performance aggregate is 73 percent but the fact is that the non-oil revenue performing very well above the target, while the oil and gas revenue is lagging,” Ahmed explained.
Ahmed further disclosed that the government borrowed N3.65tn in the first eight months to finance its N4.3tn fiscal deficit. She said that the deficit was covered by proceeds from the sales of government assets through the privatisation process and a drawdown of bilateral and multilateral tied loans.
“As at August we had a fiscal deficit of N4.29tn, this is against the prorated target of N4.61tn and we financed this deficit by utilization of N136.77bn from proceeds of the sales of government assets through the privatisation process, also by a drawdown of bilateral and multilateral tied loans in the sum of N473.12bn and new borrowings of N3.65tn from both domestic and foreign sources,” she said.
