Press "Enter" to skip to content

FG spends N8.94 trillion on debt servicing in 9 months – CBN 

The Federal Authorities spent N8.94 trillion on debt servicing within the first 9 months of 2024, accounting for 47% of complete expenditure in the course of the interval.

The quantity represents a 56.8% enhance from the N5.69 trillion spent in the identical interval of 2023.

That is in keeping with an evaluation of information from the quarterly statistical bulletin of the Central Bank of Nigeria (CBN).

The rising debt servicing value highlights the rising burden of Nigeria’s debt obligations amidst widening fiscal deficits.

Debt-to-revenue ratio worsens 

The debt-to-revenue ratio rose considerably, with debt servicing consuming 147% of retained income within the first 9 months of 2024. This compares unfavorably to 2023, when the ratio stood at 132%.

The federal government retained N6.08 trillion in income in the course of the interval, whereas debt servicing prices overshadowed this determine. This development signifies an rising reliance on borrowing not only for budgetary operations but in addition for servicing present money owed.

Breakdown of expenditure 

Recurrent expenditure rose sharply to N15.11 trillion within the first 9 months of 2024, up by 45.6% from N10.38 trillion in the identical interval of 2023. Key parts of recurrent spending included:

  • Personnel prices: Elevated by 20% to N3.59 trillion, from N2.99 trillion.
  • Overhead prices: Rose by 51.4% to N892.85 billion, from N589.63 billion.
  • Transfers: Greater than doubled, rising by 83.8% to N1.31 trillion from N711.36 billion.
  • Pensions and gratuities: Declined marginally from N339.66 billion in 2023 to N336.61 billion in 2024.

Capital expenditure additionally elevated, rising by 20.8% to N3.86 trillion, in comparison with N3.19 trillion in 2023. Nonetheless, the expansion in capital spending remained modest in comparison with recurrent expenditure, underscoring how rising debt obligations proceed to crowd out essential investments in infrastructure.

Fiscal deficit widens 

The fiscal deficit expanded by 39.3%, rising from N9.25 trillion within the first 9 months of 2023 to N12.89 trillion in the identical interval of 2024.

This rising deficit displays the persistent hole between authorities income and expenditure, compounded by escalating debt servicing prices.

What you need to know 

Throughout Nigeria’s sixty fourth Independence Anniversary broadcast, President Bola Tinubu said that his administration had decreased the debt service-to-revenue ratio from 97% to 68%.

He emphasised the necessity to finish the cycle of borrowing to finance public spending and pressured that the nation couldn’t maintain a scenario the place 90% of income was spent on debt servicing.

  • Nonetheless, the most recent CBN information contradicts this declare, displaying the debt service ratio has worsened to 147% in 2024.
  • Tileriwa Adebayo, CEO of The CFG Advisory, not too long ago expressed issues over the fiscal regime of President Bola Tinubu’s administration, describing the rise in debt servicing from N8 trillion in 2024 to N16 trillion in 2025 as a ‘crimson flag’.
  • Adebayo famous that the escalating value of debt servicing far outweighs essential nationwide spending, together with allocations to defence, safety, infrastructure, well being, and training mixed.
  • He emphasised the necessity for the federal government to restructure its monetary commitments and undertake asset gross sales as a method to ease the debt burden.
  • Adebayo suggested the federal government to discover different financing choices, together with key asset gross sales, to scale back the reliance on borrowing.

The rising debt servicing burden, widening fiscal deficit, and declining fiscal house increase issues about Nigeria’s fiscal sustainability.


..

Be First to Comment

    Leave a Reply

    Your email address will not be published. Required fields are marked *