FG Spent 97% Of Jan-May Revenue On Debt Servicing

The federal government has spent N1.8 trillion on debt servicing between January and May 2021.

This is out of the N1.84 trillion revenue generated within the same five months.

This puts the nation’s debt-to-revenue ratio, a key measure of debt sustainability, at 97.8 percent for the period under review.

The Minister of Finances and National Budget, Zainab Ahmed, said the federal government’s share of oil revenues for the five months was N289.61 billion, which represents a 50 percent performance.

Analyzing the breakdown, she said that the non-oil tax revenues totaled N618.76 trillion, company income tax (CIT), and value-added tax collections were ahead of the budget targets with N290.90 billion and N123.85 billion respectively.

“Customs collections was N204.0 billion (86% of target). Other revenues amounted to N762.70 billion, of which Independent revenues was N487.01 billion,” she said.

On the expenditure side, Ahmed said a total of N4.86 trillion was spent in the five months down to May — this excludes government-owned enterprises and project-tied expenditures.

“Of the expenditure, N1.80 trillion was for debt service (37% of FGN expenditures), N1.50 trillion for personnel costs, including Pensions (31% of FGN revenues),” she added.

However, Ahmed noted that as of May, N973.13 billion had been released for capital expenditure.

She said the gross oil and gas revenue for 2021 was projected at N5.19 trillion and as of May, N1.49 trillion was realized out of the prorated sum of N2.16 trillion — this represents 69 percent performance.

“Oil and gas deductions were N194.31 billion (or 45.8%) more than the budget. This is mainly attributable to petroleum subsidy costs which were not provided for in the 2021 budget,” she said.

“After netting out deductions (including 13% derivation), net oil and gas revenue inflows to the Federation Account amounted to N872.16 billion. This is N864.20 billion or 49.8% less than the projection as of May.