According to the 2023-2025 Medium Term Expenditure Framework & Fiscal Strategy Paper, debt service consumed N6.16 trillion in 16 months.
The Federal Government paid N4.22 trillion on debt service in 2021, and an additional N1.94 trillion from January to April of 2022.
According to a breakdown, domestic debt service in 2021 cost N2.05 trillion while foreign debt service consumed N946.29 billion. There was also N1.22 trillion in interest on ways and means, which is what is meant when the government borrows money from the Central Bank of Nigeria, and N600 million in sinking funds.
The 2023-2025 MTEF/FSP document also said that the Federal Government expected debt payments to cost N10.43 trillion by 2025.
The N3.69 trillion budgeted for debt service in 2022 has increased by 182.66 percent to this amount.
But Dr. Zainab Ahmed, the minister of finance, budget, and national planning, and Patience Oniha, the director general of the debt management office, have claimed that the country’s revenue issues, not its debt problems, are the real issue.
The International Monetary Fund had previously issued a warning that if the government didn’t take necessary steps to increase revenue production, debt servicing may consume 100% of the Federal Government’s revenue by 2026.
According to a report by the Nigerian Economic Summit Group and the Open Society Initiative for West Africa, ten other members of the Economic Community of West African States, including Nigeria, are currently experiencing economic crisis due to their high levels of debt.
- Tags: #CBN, #debtservicing, #finance
