The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed has sounded the alarm bells as she revealed that the country’s debt service cost in the first quarter (Q1) 2022 was N1.94 trillion, N310 billion higher than the actual revenue received during the period.
Also, Ahmed projected a total of N6.72 trillion as full-year budget for petrol subsidy payment in 2023, if the country decides to continue with the policy that had been identified as a drain on the economy.
It also emerged yesterday that the federal government spent more to service debt in the first quarter (Q1) of 2022, than the actual revenue it earned during the same period.
The Minister of Finance disclosed these when she unveiled the Medium Expenditure and Fiscal Strategy Paper (MTEF-FSP) in Abuja.
With debt service cost outstripping the country’s revenue, it is a clear indication of dangers ahead and policymakers must be more than willing to implement the much-needed reforms to save the economy.
The minister explained: “The aggregate expenditure for 2022 is estimated at N17.32 trillion, with a pro rata spending target of N5.77 trillion at the end of April.
“The actual spending as of April 30th was N4.72 trillion. Of this amount, N1.94 trillion was for debt service, and N1.26 trillion was for personnel costs, including pensions.
“As at April, N773.63 billion had been spent on capital expenditure. As of April 2022, FGN’s retained revenue was only N1.63 trillion, 49 per cent of the pro rata target of N3.32 trillion.”
She affirmed that the federal government’s share of oil revenue was N285.38 billion, representing 39 per cent performance while non-oil tax revenues totalled N632.56 billion — a performance of 84 per cent.
Ahmed also projected that should subsidy end in June 2023, based on the federal government’s earlier timeline, the sum of N3.36 trillion would be required to meet the financial obligations associated with subsidising the product.
The government explained that the Nigerian National Petroleum Company (NNPC) Limited, which on Tuesday officially transitioned into a fully commercial entity, would bear the cost of subsidy on petrol for the first six months of the year.