Nigeria has a really big challenge on our huge borrowing culture: we are now spending 97% of our revenue just to service debt. The implication is that most of our recurrent expenditures are now financed through loans and that creates a vicious circle, triggering the need for more loans. In other words, if you have to borrow to pay salaries and handle basic things, you will keep spending more revenue on servicing debts. Simply, Nigeria needs a new playbook to get out of the circle if we hope to save to build the infrastructure of the future.
Debt servicing obligations gulped 97 percent of the Nigerian government’s total revenue in 2020, a report has shown.
According to BudgIT, a civic-tech non-profit organisation, of the N3.42 trillion generated as revenue, Nigeria expended N3.34 trillion on debt servicing.
The report said total expenditure stood at N10.01 trillion.
“This means nearly all FG’s salaries, overhead & CAPEX (Capital Expenditure) were financed with loans & CBN support,” the civic group said.
According to BudgIT’s “2020 Budget Implementation Analysis” report released on Friday, N4.65 trillion was spent on non-debt recurrent expenditure.
“In 2020, FG projected a total revenue of N5.37tn; however, the actual total revenue eventually stood at N3.42tn. This represents a 63.71% revenue performance,” BudgIT said.“The cost of servicing FG’s debt is drowning Nigeria as the cost continues to grow, gulping a total of N3.34tn (97%) from the total revenue.”
The Nigerian government’s revenue from oil however recorded a significant boost of N1.41 trillion, surpassing the oil revenue projections of N1.01 trillion.
With insecurity scaling across Nigeria, the debt problems will remain. The bad guys have moved to even kidnapping emirs, and there seems to be no solution in the near future: “The police in Kaduna State say the Emir of Kajuru, Alhassan Adamu, and 10 others have been kidnapped by suspected bandits in the early hours of Sunday in Kajuru town, headquarters of Kajuru Local Government area of the state.”
The near future looks extremely challenging for Nigeria with all these paralyses; we need to pray for a good landing in the nation. In America, the biggest problem is that companies cannot find workers to hire; in Nigeria, insecurity has made it largely impossible for farm workers to go to their farms, creating a huge crack on future food security.
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