The recent report released by Nigeria’s Minister of Finance, Dr Zainab Shamsuna Ahmed, stated that from January – April 2022 Nigeria’s debt service gulped 118% of its revenue generated in the period under review. The 118% represents N1.94 trillion.
Again, the 118% or N1.94 trillion spent on servicing Nigeria’s debt within the first four months of the year 2022 represents 49% of the projected target of N3.32 trillion for that period. And N8.34 trillion short of the projected revenue of N9.97 trillion for the year 2022.
Nigeria’s oil revenue for the first four months of the year was N285.38 billion. And non-oil tax revenue summed up to N632.56 billion.
- Africa’s largest economy also earned N298.83 billion and N102.97 billion from Companies Income Tax (CIT) and Value Added Tax (VAT).
Nigeria has spent a total of N4.72 trillion from January to April 2022. The Federal Government has so far spent N1.94 trillion on servicing debts, N1.26 trillion on personnel cost inclusive of pensions and N773.63 billion on capital expenditure.
What you should know
- The International Monetary Fund (IMF) in June projected that Nigeria, Africa’s most populous nation, would spend almost all its revenue generated on repaying loans by 2026.
- In 2021, Nigeria’s government spent a total of N4.22 trillion on servicing debt, a rise of N0.95 trillion from the N3.27 trillion in 2020.
- Also, Nigeria’s debt in the first quarter of 2022 rose to $100.07 billion from $95.87 billion in the fourth quarter of 2021.
What to watch
These figures show that Nigeria’s revenue can no longer service the country’s existing debt. This could force Nigeria to acquire more loans seeing that the country’s generated revenue is low.