Figures from the Apex bank indicate that the federal government spent $112.35m servicing external debt in January 2023.
A Data from the Central Bank of Nigeria’s Weekly International Payments showed that the Federal Government spent $112.35m servicing external debt in January 2023.
The amount spent in January was 146.17 per cent higher than
the $45.64m spent in December 2022.
This occurred as the Federal Government struggled to boost
its revenue base despite its revenue generation efforts.
In an earlier report, the Federation Account Allocation
Committee (FAAC) shared N750.17bn among the three tiers of government in
January 2023.
The figure represents a decrease of N240.02bn compared to
the N990.19bn shared in December 2022.
In 2022, Nigeria spent $2.4bn to service its external debt,
which was a slight increase from the $2.11bn spent in 2021.
Also, the Federal Government deducted over N78bn from
allocations made to the states for external debt servicing.
This was according to data from the Federation Account Allocation
Committee Disbursement reports published by the National Bureau of Statistics.
The deductions were made in 2022 from the allocations given
to state governments from the Federation Account.
The federation account is currently being managed under a
legal framework that allows funds to be shared under three major components:
statutory allocation, Value Added Tax distribution and derivation principle.
Most hit state by the deductions was Lagos, with about
N23.61bn deducted in 2022 for external debt servicing.
It was followed by Kaduna, with N10.25bn deducted, and Cross
River with N7.56bn deducted.
The International Monetary Fund recently said the Federal
Government projected to spend 82 per cent of its revenue on interest payments
in 2023.
According to the IMF, external debt (including that of the
private sector) will rise to $121.6bn, with external reserves climbing to
$37.5bn.
It disclosed this in a table of projections in its ‘IMF
Executive Board Concludes 2022 Article IV Consultation with Nigeria Summary
The projections showed an improvement in the share of the
government’s revenue used as interest payment, with interest payment falling
from 96.3 per cent in 2022 to 82 per cent in 2023.
It added that interest payment was 86.1 per cent and 87.8
per cent of the Federal Government’s revenue in 2020 and 2021, respectively.
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