Nigeria’s monthly debt servicing spending reaches $112.35m says CBN

According to the Central Bank of Nigeria (CBN), the Federal Government incurred expenses totaling 112,35 million dollars in order to service its external debt in January of 2023.

According to information found in the Central Bank of Nigeria’s Weekly International Payments report, the amount of money spent in January was 146.17 percent higher than the $45.64 million that was spent in December.

This took place at a time when the federal government was having trouble increasing its revenue base despite its efforts to generate more revenue.

It is important to remember that in January of 2023, the Federation Account Allocation Committee distributed N750.17 billion among the three levels of government.

When compared to the total amount of N990.19 billion that was distributed in December 2022, this figure represents a decrease of N240.02 billion.

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The amount of money that Nigeria spent to service its external debt in 2022 was $2.41 billion, which is a moderate increase from the $2.11 billion that was spent in 2021.

During this time, the Federal Government reduced the allocations it had made to the states for the purpose of servicing the states’ external debt by more than N78 billion.

This information was obtained from the reports on expenditures made by the Federation Account Allocation Committee that were made public by the National Bureau of Statistics (NBS).

The deductions were taken in the year 2022 from the allocations that were handed out by the Federation Account to the various state governments.

Currently, the federation account is being managed according to a legal framework that enables funds to be shared according to three major components. These components are the statutory allocation, the distribution of value-added tax, and the derivation principle.

According to the findings of the checks, Lagos was the state that was affected by the deductions the most, with approximately N23.61 billion being deducted in 2022 for the purpose of servicing external debt.

After that, Kaduna had N10.25 billion deducted from their total, and Cross River had N7.56 billion taken away from their total.

Recently, the International Monetary Fund (IMF) reported that the United States Federal Government projected to spend 82% of its revenue on interest payments in the year 2023.

The International Monetary Fund forecasts that total external debt, which will include the amount owed by the private sector, will reach $121.6 billion, while total external reserves will increase to $37.5 billion.

This information was provided in a projections table that was included in the report titled “IMF Executive Board Concludes 2022 Article IV Consultation with Nigeria Summary.”

According to the projections, the percentage of the government’s revenue that was used to pay interest will decrease from 96.3 percent in 2022 to 82 percent in 2023. This represents an improvement from the previous year’s percentage, which stood at 96.3 percent.

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In addition, it stated that the payment of interest accounted for 86.1 percent and 87.8 percent of the revenue of the federal government in the years 2020 and 2021 respectively.