• Wednesday, May 22, 2024
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BusinessDay

Debt servicing gulped 106% of FG’s revenue in 2022

Understanding the foundation of Nigeria’s development crisis

The Nigerian government in 2022 spent a total of N5.65 trillion on debt servicing, representing 106 percent of the total N5.30 trillion revenue generated within the period.

According to the 2022 FGN Budget Implementation report sighted by BusinessDay, the total revenue comprised N3.63 trillion from the Federation Account Allocation Committee (FAAC), and N1.67 trillion received from independent revenue sources.

BusinessDay findings indicate a decline from N11.045 trillion in revenue in the 2022 approved budget.

On the other hand, the Federal Government’s total expenditure stood at N14.63 trillion, leading to a deficit of N9.30 trillion. This is also a decline compared to the N21.82 trillion expenditure in the 2022 approved budget.

Also, a breakdown of the total expenditure showed that statutory transfer accounted for N810.12 billion, recurrent (non-debt) accounted for N5.03 trillion, capital expenditure gulped N3.13 trillion, and N1.24 trillion was spent on capital development fund.

Read also: FG takes $1.95bn World Bank loans, ignores debt concerns

Non-debt recurrent expenditure comprised personnel costs at N3.49 trillion, overhead costs at N371 billion, other service-wide votes at N715 billion, and CRF pensions at N387 billion.

BusinessDay had earlier reported that the Federal Government deployed almost all of its revenues generated within the first half of 2023 (99 percent) on debt servicing.

Figures show that between January and June 2023, the total retained revenue of the Federal Government was N4.06 trillion, while it utilised N4.02 trillion on debt servicing within the same period.

According to Olumide Ayodele, technical assistant to the director-general of the Budget Office, the government revenues have remained below expectations as out of the N5.52 trillion targeted for the first six months of the year, about N4.067 trillion was generated, indicating N1.46 trillion shortfall.

He noted that of the total N4.067 trillion retained revenue for the period, N604.1 billion was generated from the oil sector, while non-oil revenue was N1.14 trillion. Company income tax (CIT) and value added tax (VAT) were N592.68 billion and N195 billion respectively.

The total revenue collected by Customs Service was N306.18 billion while other revenues amounted to N2.14 trillion.

Read also: Nigeria’s N87trn debt still within moderate level — IMF

According to Ayodele, of the N7.76 trillion actual spending for the first half of the year, N4.02 trillion was spent on debt servicing and N2.28 trillion was spent on personnel cost, including pension.

He, however, noted that only about N475.98 billion has been released for capital expenditure as of June 2023.