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HomeTop NewsNigeria spends N1.03 trln on debt service in April vs ~CBN

Nigeria spends N1.03 trln on debt service in April vs ~CBN

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By Samuel Bankole

Nigeria spent N1.03 trillion on debt service obligations in the first quarter of 2021, up from N779.73 billion spent on debt service in the corresponding period of last year.

According to the Central Bank of Nigeria (CBN) April monthly economic report, debt service gulped N461.98 billion in the fourth of 2020.

“The significant rise was due, largely, to the interest payments on additional FGN bonds, Promissory Notes and the redemption of the $500 million Eurobonds, which matured in January 2021,” the report stated.

Revenue accruing to the federal government in April fell by 38.5 percent below the N665.53 billion target in the budget for April 2021 to N409.31 billion.

“The decline, relative to the budget benchmark, was attributed to
shortfalls in receipts from the Federation Account, Special Accounts and
Special Levies of the FGN,” the regulatory bank said in the report.

The report also stated that “Given the need to rationalise government spending, in view of persisting revenue shortfalls and tightening fiscal space, provisional aggregate expenditure of the FGN declined to N559.67 billion in April 2021, which was 50.6 percent below the monthly target of N1,132.34 billion.

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“In addition, the observed decline in spending was partly explained by the
inherent lag in budgetary releases.

“Of the total spending, capital expenditure, at 50.4 percent, uncharacteristically accounted for the chunk of the total expenditure, while recurrent expenditure and transfers constituted 46.9 percent and 2.7 percent, respectively,” the CBN stated.

The government recorded N150.36 billion fiscal deficit in the month of April, compared with N528.92 billion posted in the corresponding period of last year and N1.02 trillion in the previous month.

The report stated that the overall balance in April was 67.8 percent lower than the N466.80 billion budget benchmark for the period,

“Whilst the low deficit enhances the maneuverability of fiscal policy in the near-term, it was partly explained by the inherent lag in budgetary releases for recurrent spending, which understated the expenditure-side of the FGN’s fiscal operations in the period,” the CBN stated in the report.

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