At last Nigeria fiscal doom arrives as country’s debt exceeds her total revenue. Nigeria’s debt servicing stands at N1.94 trillion, while country’s total revenue generated stands at N1.63 trillion. This shows a difference of over N300 billion. The failure of Nigeria to meet her financial obligation especially her debt servicing will have an adverse effect on the already depressed economy. It will affect Nigeria’s credit rating, culminating a lower Fitch Ratings. It will worsen the credit illiquidity and making further borrowing cumbersome and nearly impossible, except with back breaking interest rates.
“According to details of the 2022 fiscal performance report for January through April, Nigeria’s total revenue stood at N1.63 trillion while debt servicing stood at N1.94 trillion, showing a variance of over N300 billion. The report showed that gross oil and gas federation revenue for the first four months of the year was projected at N3.12 trillion but as at April 30, only N1.23 trillion was realised, representing a mere 39% performance.”
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed said, “The aggregate expenditure for 2022 is estimated at N17.32 trillion, with a pro rata spending target of N5.77 trillion at the end of April.
“The actual spending as of April 30th was N4.72 trillion. Of this amount, N1.94 trillion was for debt service, and N1.26 trillion was for personnel costs, including pensions.
“As at April, N773.63 billion had been spent on capital expenditure. As of April 2022, FGN’s retained revenue was only N1.63 trillion, 49 per cent of the pro rata target of N3.32 trillion.”
In addition, when you add the Petrol subsidy of almost N6.7trillion, you will be begun to see that Nigeria has dug a hole that she will not escape for some time. As 78 per cent of FG’s spending goes into debt payment and personnel cost, then the remaining 12 percent is what is left for government to attend to other sectors of the budget.
As for Naira, it is now a junk currency. Momentarily, Central Bank of Nigeria (CBN) the country reserve bank was offering 450-465 Naira per dollar, while at parallel market (black market) Naira was trading above 615 a dollar. In addition, there is shortage of dollar for marketers. The business community needs foreign exchange to buy raw materials for their manufacturing industries. Naira deteriorates as the pressure of the economic woes of inflation rate at almost 19 percent tramples on it.