• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Nairalytics
    • Macros
    • Research Analysis
    • Budget
    • Public Debt
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Nairalytics
    • Macros
    • Research Analysis
    • Budget
    • Public Debt
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
Nairametrics
No Result
View All Result
Home Opinions Op-Eds
land borders to be reopened soon, Finance, Ministaer, vow to recover AMCON debt through issuance of promissory notes, FG reiterates stance on IPPIS as ASUU threatens strike, Finance Minister, Zainab Ahmed identifies capital market as key driver for economic growth , Nigeria has paid $1.09 billion to service its debts in 2019  , Dividends on oil proceeds will be taxed - FG , State governments own most bad roads - Finance Minister says, Budget deficit increases by N351.98 billion, as FG misses revenue target, Economy: Funding MSMEs in Nigeria , Finance Bill: New tax regime to take effect from Jan 2 - FG , Again, Finance Minister argues that Nigeria is not in debt distress , ECOWAS: Single currency regime not kicking off in 2020  , FG: CBN holds N43 billion stamp duty charges collected by banks , FG may shift deadline to deactivate bank accounts without tax verification, Confusion as ministry and presidency disagree over Finance Act start date, 7.5% VAT: Implementation to begin Feb 1 – FG , Finance Minister: Nigeria to go into recession if ..., Foreign tech companies that will now pay tax to FGN: see the criteria

Nigeria’s fiscal position; a revenue or debt problem?

CSL Stockbrokers by CSL Stockbrokers
2 years ago
in Op-Eds
Share on FacebookShare on TwitterShare on Linkedin

The Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed on Wednesday during the public presentation of the details of the 2022 Appropriation Bill that it spent N4.2tn on debt servicing between January and November 2021. This sum represents 76.2% of the N5.51tn revenue generated during the period under review.

According to the report, the Minister also noted that oil revenue contributed N970.3bn to the total revenue generated within the period, while non-oil tax contributed N1.6tn. Other revenues amounted to N2.8tn. Speaking of expenditure, she noted that the government spent N12.56tn out of the N13.57tn prorated budget within the review period. The total expenditure constitutes N4.20tn spent on debt servicing, N3.02tn on personnel cost, including pensions, and N3.2tn expended on capital projects. She, however, stressed that the figures for 2021 were provisional and, as such, subject to updates and reconciliation.

While defending government borrowing and the country’s debt level, the minister insisted the country had a revenue challenge and not a debt problem, adding that the debt level was still within sustainable limits. According to her, having witnessed two economic recessions in the country had to spend its way out of recession, which contributed significantly to the growth in the public debt.

Nigeria’s total public debt came to N38.0tn at the end of September 2021, with external debt making up 40.98% and domestic debt making up 59.02%. The increase of N2.5tn, when compared with the corresponding figure of N35.5 trillion at the end of Q2 2021, was largely accounted for by the US$4bn Eurobonds issued by the Government in September 2021. Despite the increasing debt stock and debt service payments, the House of
Representatives, on Tuesday, approved external borrowings totalling US$5.8bn and a grant of $10m for the Federal Government as part of the proposed 2018–2020 External Borrowing Plan.

But for the composition of our expenditure, we would have agreed with the Minister of Finance that the country’s problem is mainly a revenue problem. However, the significantly higher recurrent component of the budget continues to drag the nation’s economic growth, resulting in poor infrastructural development.

Spending more on capital projects can promote industrialization, improve local purchasing power, and help the federal government’s diversification drive. Nigeria continues to face issues of poor revenue generation and a lack of will to efficiently manage its expenditure. No significant cuts have been made to its overheads, and statutory spending has continued to rise. The growing debt stock with little to show for it in terms of capital expenditure remains a major concern.

While we agree that the relatively low debt to GDP ratio, which she noted was at 30% as of November 2021 remains significantly below the Sub-Saharan Africa level of 58% and below the 40% limit set by the Debt Management Office, we note that the government’s interest payments continue to absorb a large share of federal government revenues, making the otherwise low debt-to-GDP ratio highly vulnerable to shocks.

Tags: 2022 budget
CSL Stockbrokers

CSL Stockbrokers

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *







NM newsletters
Glo
Kwakol
Abbey
Zenth Bank
UBA
Mega Millions

Business News | Stock Market | Money Market | Cryptos | Financial Literacy | SME |

Recent News

  • QorePay Technology Solutions set to launch innovative Fintech solution to revolutionize payments in Nigeria
  • Falcon receives N19.41 billion for 15,000 metric ton LPG storage facility in Rivers   
  • Festive Delights Await: Dive into Xiaomi’s Christmas special for instant gifts and savings!

Follow us on social media:

Recent News

Qorepay

QorePay Technology Solutions set to launch innovative Fintech solution to revolutionize payments in Nigeria

December 5, 2023
Falcon receives N19.41 billion for 15,000 metric ton LPG storage facility in Rivers    

Falcon receives N19.41 billion for 15,000 metric ton LPG storage facility in Rivers   

December 5, 2023
  • Download Nairametrics iOS App
  • Download Nairametrics Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer

© 2023 Nairametrics

No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Nairalytics
    • Macros
    • Research Analysis
    • Budget
    • Public Debt
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
  • Login
  • Sign Up
  • Cart

© 2023 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In