The Federal Government made a total of N3.25trillion in 2020, according to a review of the budget performance of the 2020 Appropriation Act.
The review also showed that the Federal Government spent a total of N2.34trillion on debt servicing within the year.
This means that 72 per cent of the government’s revenue was spent on debt servicing. It also puts the government’s debt servicing to revenue ratio at 72 per cent.
In 2019, The Federal Government made a total revenue of N3.86trillion. Within the year, debt servicing gulped N2.11trillion. This puts the Federal Government’s debt servicing to revenue ratio in 2019 at 54.66 per cent.
This means that between 2019 and 2020, the Federal Government’s debt servicing to revenue ratio jumped from 54.66 per cent to 72 per cent.
As of March 31, the Debt Management Office put Nigeria’s total debt at N33.11trillion.
Out of this figure, N20.64trillion (62.33 per cent) was owed to domestic creditors, while N12.47trillion (37.67 per cent) was owed to foreign creditors.
Of the domestic debt profile, N16.51trillion belongs to the Federal Government while N4.12trillion belongs to the 36 states of the federation and the Federal Capital Territory Administration.
The N12.47trillion foreign debt was not broken into federal and subnational segments. However, about 86 per cent of Nigeria’s foreign debt usually belong to the Federal Government.
Although the Federal Government consistently argues that its debt to Gross Domestic Product is low, economists and experts say that it is better to use the debt servicing to revenue ratio to measure a country’s indebtedness.
This is because the debt servicing to revenue ratio measures a country’s capacity to repay its loans.
Although the Federal Government had projected revenue of N5.84trillion for 2020, actual revenue was N3.25trillion. It also projected to spend N2.68trillion on debt servicing.
As in the years before, a greater percentage of the country’s revenues came from oil in 2020. Oil revenue contributed N1.41trillion, non-oil sources contributed N1.26trillion, while independent funding sources contributed N578.45billion.
In 2020, the Federal Government spent N3.17trillion on personnel and overhead costs, two segments of the nation’s recurrent expenditure.
The government spent N1.57trillion on capital expenditure. Total expenditure for the year was N9.75trillion, with the nation borrowing a total of N2.06trillion as domestic borrowing in the year.
In 2019, Nigeria made N3.86trillion as revenue. Oil revenue contributed N1.620trillion; non-oil revenue contributed N1.69trillion, while independent funding contributed N547.270billion.
The Federal Government spent N2.37trillion on overhead and personnel costs within the year and N1.17trillion on capital expenditure.
Total debt servicing gulped N2.11trillion of government revenue. Total expenditure for the year was N8.29trillion, and total borrowing was N912.82billion.
In 2018, the Federal Government generated N3.48trillion as revenue. Revenue from oil contributed N1.96trillion; non-oil contributed N1.12trillion, and independent funding was N395.2billion.
Overhead and personnel cost gulped N2.05trillion, while N736.51billion was spent on capital projects. Total debt servicing gulped N2.09trillion of government revenue.
This put debt servicing to revenue ratio at 60.06 per cent. Expenditure for the year totalled N6.27trillion, and total borrowing for the year was N1.74trillion.
According to the budget office, in 2020, the Federal Government continued to meet its non-discretionary expenditures even as budget implementation continued to be affected by poor revenue outcomes.
The office said that the performance of the economy during the fourth quarter of 2020 was encouraging, considering developments in the global economy and the performance of other economies.