Nigeria spends 97.5% of January to May revenue on debt servicing

Nigeria’s federal government used 97.5 percent of its January to May 2020 revenue to service debts, the budget call circular published by the Budget Office has shown.

According to the circular, the federal government generated total revenue of N1.62 trillion out of the N2.62 trillion projected for the period, out of which N1.58 trillion, representing 97.5 percent was spent on debt servicing.

The document said the federal government spent a total of N3.98 trillion within the five-month period, out of which N1.79 trillion was said to have been released for non-debt recurrent expenditure, including salaries, pensions and overheads.

A total of N378.85 billion was released for capital expenditure during the period.

A breakdown of the revenue generated showed that N701.6 billion was realised as oil revenue while non-oil tax revenues totalled N439.32 billion (65 percent of revised target).

A total of N213.24 billion was generated from companies income tax, N68.09 billion from value-added tax and N158 billion was realised from customs collection.

The 2020 budget had to be revised after crude oil prices fell on the back of a price war between Russia and Saudi Arabia and the COVID-19 pandemic disrupted global supply chains.

Between the January and May period, the federal government incurred a total debt of N2.35 trillion.

The revised N10.8 trillion 2020 budget includes a N4.98 trillion deficit which is to be mainly financed by borrowing.

Recall that the International Monetary Fund (IMF) had in June, projected that debt servicing will gulp all of Nigerian government’s revenue in 2020.