Quote from Ndubuisi Ekekwe on October 14, 2021, 9:30 PM

Nigeria is spending huge on debt servicing: 74% of revenue on debt servicing in the first 8 months of 2021.

“For the 2021 performance, between January and August, revenue generated was N3.93tn which was 73 per cent of the prorated target. Out of this amount, CIT and VAT collections were N547.5bn and N235.7bn respectively representing 121 percent in the case of CIT and 148 per cent in the case of VAT of the prorated target.

“Custom collections 338.6bn represents 99 per cent of prorated target. Other revenues amounting to N1.7tn of which the federal government independent revenue of N691.36bn while GEOs revenue was N873.5bn.

“On the expenditure side, N8.14tn representing 84 per cent of the N9.71tn prorated expenditure from January to August has been spent. This performance includes expenditure estimates of Government Owned Enterprises (GEOs) but doesn’t include project tied loans

“Of the expenditure, N2.89tn was utilized for debt servicing, while N2.57tn was utilised for personnel cost including pension and gratuities. As at the end of August, N1.75tn has been expended for capital projects, of this amount, N1.723tn represents 81 per cent of the aggregate provision for Ministries Department Agencies’ capital prorated, while N36.01bn is expenditure from GEOs.

“So the story here is that the revenue performance aggregate is 73 per cent but the fact is that the non-oil revenue performing very well above the target, while the oil and gas revenue is lagging.

"As at August we had a fiscal deficit of N4.29tn, this is against the prorated target of N4.61tn and we financed this deficit by utilization of N136.77bn from proceeds of the sales of government assets through the privatisation process, also by drawdown of bilateral and multilateral tied loans in the sum of N473.12bn and new borrowings of N3.65tn from both domestic and foreign sources.’’

Meanwhile, the government will penalize agencies and ministries that do not meet revenue targets.

“We are working to ensure that MDAs appropriately account for and remit their internally generated revenues.

“GOEs’ revenue performance / remittance will be enhanced through effective implementation of the enhanced performance management framework, including possible sanctions should they default on their targets; tighter expenditure control including enforcing of Finance Act 2020 provision limiting GOEs cost-to-revenue ratio to maximum of 50 per cent; and regular independent monitoring and reporting of revenue and expenditure performance of GOEs by both the Budget Office of the Federation and the Office of the Accountant General of the Federation.

“These agencies cannot spend more than 50 per cent of what they generate. And this is one major revenue that would be coming into the government’s treasury.’’