Debt servicing gulps N8.56tr as FG records 225% deficit in 2023

The burgeoning debt servicing obligations have continued to worsen Nigeria’s economic woes as the country spent a whopping N8.56 trillion, or 43.9 percent of the budget, to service its debt in 2023.

The country also incurred a fiscal deficit of N13.50 trillion, or 225 percent, from spending N19.50 trillion, three times more than its total revenue of N5.99 trillion in 2023.

BudgIT, a nongovernmental organisation, on its X handle yesterday, citing the 2023 Fiscal Accounts Report of the Accountant General of the Federation, said the Federal Government made a revenue of N5.99 trillion and spent N19.50 trillion, recording a deficit of N13.50 trillion, or 225 percent, in the process.

The organisation noted that the government spent more than three times what it earned in revenue last year.

Giving details of the revenue, the nongovernmental group said N3.80 trillion of the revenue came from the Federation Account Allocation Committee (FAAC), while the federal government’s share of independent revenue brought in N1.98 trillion.

The FG’s share of the Federation Account contributed N2.39 trillion, exchange rate differences were N715.75 billion, while value-added tax (VAT) generated N441.87 billion.

“While the government’s revenues are swelling, a chunk of the earnings are absorbed through debt servicing, leaving the government with a pittance to meet its fiscal responsibilities,” BudgIT said, adding that debt servicing accounted for 43.9 percent of the budget at N8.56 trillion—the largest single expense.

BudgIT also stated that non-debt spending took up 27.8 percent at N5.42 trillion, while capital expenditure was 23 percent at N4.49 trillion.

“Of the money spent in 2023, capital expenditure, which includes investments in infrastructure projects, construction of schools or hospitals, received a paltry N4.49 trillion.

“It goes without saying that a significant portion of government spending was directed towards debt servicing, surpassing the revenue generated.

“As a result, the government continues to drift away from fiscal responsibility by borrowing more than it earns, resulting in a deficit of N13.50 trillion,” BudgIT stated.