Debt Servicing Gulps 69% Of Revenues In 1 Year–Budget Office

Nigeria’s fiscal information remains nether strain arsenic the national authorities spent 69 per cent of its 2024 revenues connected indebtedness servicing.

This was revealed successful the latest Budget Implementation Report (BIR) released by the Budget Office of the Federation (BOF).

The study showed that retired of the N19.354 trillion earned successful 2024, N11.887 trillion went into indebtedness payments alone, leaving constricted infrastructure and improvement spending resources.
Although an betterment from 2023, erstwhile indebtedness work swallowed 78 per cent of revenue, analysts warned that the fig was inactive dangerously supra planetary standards.

“The World Bank and IMF urge that indebtedness work should not transcend 30–40 per cent of authorities gross for processing economies. Nigeria’s 69 per cent means astir N7 retired of each N10 earned is utilized to work debt, leaving precise small fiscal abstraction for improvement spending,” said Prof. Godwin Oyedokun, Accounting and Financial Development adept astatine Lead City University, Ibadan.

The national authorities had projected an aggregate expenditure of N27.5 trillion against expected gross of N18.32 trillion, implying a fiscal shortage of N9.18 trillion.

However, existent gross exceeded expectations, hitting N19.354 trillion, astir N1.03 trillion supra target. Expenditure besides overshot projections, climbing to N28.726 trillion, N1.23 trillion higher than budgeted.
In 2024, lipid gross roseate sharply to N6.180 trillion, compared to N2.430 trillion recorded successful 2023. Non-oil gross besides accrued significantly, climbing to N4.557 trillion from N3.312 trillion the erstwhile year. Meanwhile, autarkic gross from the Federal Government, donor grants, acquisition tax, and gross retained by government-owned enterprises amounted to N8.317 trillion, up from N6.743 trillion successful 2023.

This pushed wide gross maturation to 149 per cent twelvemonth implicit year, which improvement officials described arsenic a motion of improved postulation and stronger lipid receipts.

The national authorities spent a full of N28.726 trillion moving the system successful 2024, up from N23.036 trillion successful 2023. Of this amount, N11.887 trillion was devoted to indebtedness servicing, portion N7.312 trillion went into non-debt recurrent expenditure. Capital expenditure stood astatine N7.789 trillion, representing 22 per cent of full spending, an summation from 18 per cent successful 2023. Transfers accounted for N1.738 trillion of full expenditure.

Although recurrent spending dropped somewhat from 73 per cent successful 2023 to 72 per cent successful 2024, experts accidental Nigeria’s spending operation is inactive heavy tilted toward salaries, overheads, and indebtedness obligations, leaving little country for investments that thrust semipermanent growth.

Prof. Oyedokun acknowledged the flimsy betterment successful indebtedness servicing but stressed that Nigeria’s fiscal way was inactive unsustainable.

He besides noted that portion superior expenditure roseate to 22 per cent of full spending, it remains acold beneath the 30–40 per cent benchmark required to adjacent Nigeria’s immense infrastructure spread successful captious sectors specified arsenic roads, power, education, and health.

“Low concern successful superior projects constrains productivity, occupation creation, and competitiveness,” helium said, urging reforms that would prioritise infrastructure spending implicit bloated recurrent costs.