Nigeria spent about N2.89 trillionn on debt servicing between January and August, 2021, according to the minister of finance and budget, Zainab Ahmed on Friday.
Ahmed, who said this during the public presentation and breakdown of the highlights of the 2022 appropriation in Abuja on Friday, noted that in the first eight months of the year, total expenditure stood at N8.14 trillion, with N2.88 trillion spent on debt servicing, N2.75 trillion on overhead cost and N1.75 trillion was expended on capital projects.
She said the government generated a total of N3.9 trillion in the period, comprising N547.5 billion from Company Income Tax (CIT), N235.7 billion from Value Added Tax (VAT), N338.6 billion from Customs collections and other revenues which amounted to N1.7 trillion.
Debt service gulped 74 percent of the total revenue generation of the federal government in the period under review, according to the breakdown by the finance minister.
“For the 2021 performance, between January and August, revenue generated was N3.93 trillion which was 73 percent of the prorated target. Out of this amount, CIT and VAT collections were N547.5 billion and N235.7 billion respectively representing 121 percent in the case of CIT and 148 percent in the case of VAT of the prorated target.
“Custom collections 338.6 billion represents 99 percent of prorated target. Other revenues amounting to N1.7 trillion of which the federal government independent revenue of N691.36 billion while GEOs revenue was N873.5 billion.
“On the expenditure side, N8.14 trillion representing 84 percent of the N9.71 trillion 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, N2.89 trillion was utilized for debt servicing, while N2.57 trillion was utilised for personnel cost including pension and gratuities.
“As at the end of August, N1.75 trillion has been expended for capital projects, of this amount, N1.72 trillion represents 81 percent of the aggregate provision for Ministries Department Agencies’ capital prorated, while N36.01 billion 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,” Zainab said.
She added that the government borrowed the sum of N3.65 trillion between January and August to finance its N4.3 trillion fiscal deficit.
The rest of 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 N4.29 trillion, this is against the prorated target of N4.61 trillion and we financed this deficit by utilization of N136.77 billion from proceeds of the sales of government assets through the privatisation process, also by drawdown of bilateral and multilateral tied loans in the sum of N473.12 billion and new borrowings of N3.65 trillion from both domestic and foreign sources,” she said.