The Federal Government of Nigeria spent at least $112.35m servicing external debt in January 2023, according to recent revelations made by the country’s apex bank.
Data obtained from the Central Bank of Nigeria’s Weekly International Payments indicated that the amount spent in January was 146.17 percent higher than the $45.64m spent in December 2022.
This occurred as the Federal Government strived so hard to boost its revenue base despite its revenue generation efforts.
Recall that the Federation Account Allocation Committee shared N750.17bn among the three tiers of government in January 2023.
The figure showed a sharp decrease of N240.02bn compared to the N990.19bn shared in December 2022.
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In 2022, Nigeria spent $2.4bn to service its external debt, which was a slight increase from the $2.11bn spent in 2021.
Africa Today News, New York also gathered that the Federal Government has in recent times deducted over N78bn from allocations made to the states for external debt servicing.
This was according to data from the Federation Account Allocation Committee Disbursement reports published by the National Bureau of Statistics.
The deductions were made in 2022 from the allocations given to state governments from the Federation Account.
The federation account is currently being managed under a legal framework that allows funds to be shared under three major components: statutory allocation, Value Added Tax distribution and derivation principle.
It was observed that the most hit state by the deductions was Lagos, with about N23.61bn deducted in 2022 for external debt servicing.
It was followed by Kaduna, with N10.25bn deducted, and Cross River with N7.56bn deducted.
The International Monetary Fund recently said the Federal Government projected to spend 82 per cent of its revenue on interest payments in 2023.
According to the IMF, external debt (including that of the private sector) will rise to $121.6bn, with external reserves climbing to $37.5bn.
It disclosed this in a table of projections in its ‘IMF Executive Board Concludes 2022 Article IV Consultation with Nigeria Summary
The projections showed an improvement in the share of the government’s revenue used as interest payment, with interest payment falling from 96.3 percent in 2022 to 82 percent in 2023.
It added that interest payment was 86.1 percent and 87.8 percent of the Federal Government’s revenue in 2020 and 2021, respectively