The skyrocketing cost of Nigeria’s debt profile reached a new milestone with the country’s debt service as a percentage of revenue rising to 99% in the first quarter of 2020. This is contained in the Medium-Term Expenditure Framework and Fiscal Strategy (MTEF/FSP) report recently released by the Federal Ministry of Finance, Budget, and National Planning
A look at the data obtained from the MTEF/FSP report shows that in Q1 2020, Nigeria incurred a total sum of N943.12 billion in debt servicewhile the federal government retained revenue was put at N950.56 billion. This implies Nigeria’s debt service to revenue is estimated to be 99% during the period.
This is the highest on record andit suggests almost all the revenue generated from both oil and non-oil sources was used to meet debt service obligations.
Debt service, recurrent expenditure, and Revenue Breakdown
Nigeria like the rest of the world has been battling with the COVID-19 pandemic and was expected to suffer a significant revenue shortfall. However, the data suggests the government may have experienced a significant drop in revenues before the lockdown induced economic downturn indicating that things may indeed be worse than projected.
According to the data, the country earned N950.5 billion in revenue compared to a prorated budget of N1.9 trillion representing a whoppingshortfall of 52%. Oil revenue was N464 million representing a shortfall of 30% when compared to budget while non-oil revenue was N269 billion representing a shortfall of 20 percent.