“Second Term Should be Banned for CBN Gov”: Nigerians React as FG's Debt Service Exceeds Oil Revenue

• Nigerians are reacting on social media to a recent report from the budget office of the federation
• According to the report, the CBN spent N1.68 trillion servicing the interest on ways and means
• The report stated that there was a surge in Ways and Means payments from the first half of the year

A recent report showed that the apex bank’s interest in “Ways and Means” payment of N1.68 trillion surpassed the government’s oil earnings of N813.58 billion, revealing an excess of 107% over oil revenue.

According to Dataphyte, “Ways and Means” in the Nigerian context occur when the Federal Government obtains loans from the Central Bank of Nigeria (CBN).

Nigerians have however expressed their thoughts on the report from the budget office of the federation titled ‘Medium Term Expenditure Framework and Fiscal Strategy Paper’.

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How FG’s debt service situation worsened

Legit.ng reported that the BOF explained that the FG’s debt service situation worsened due to the surge in Ways and Means payments, which increased by N966 billion from the first half of the year’s budgeted amount of N700 billion to N1.68 trillion, an amount that also exceeded the 2023 budgeted amount of N1.2 trillion by over N400 billion.

The report said that the government’s debt service account was responsible for driving the country’s total debt service for the period by N109 billion, to hit N3.94 trillion in the process.

The development exceeded the 2023 debt service budgeted amount of N3.8 trillion.

How Nigerians are reacting

Some of the reactions on X, formerly Twitter, are as follows:

@OluseyiIdowu said:

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"Oil revenue was not the only revenue of the FG during the period. FG made 5 trillion but has spent 8 trillion. The question to ask is how this deficit was financed. New ways and means of foreign debts. Whichever way, Nigeria is dangerously hanging on the cliff."

@Landlordoflagos said:

“The problem of Nigeria is way deeper. The country is being mortgaged at the moment, the generations coming has a whole lot of work to do to keep the country moving.”

@BrosManney commented:

“This is one of the reasons why no @cenbank Governor had a second term until Buhari started it. In fact second terms should be banned for @cenbank governors so that their decisions will be focused on delivering Economic benefits. Emefiele u fall my hand, e pain!”

@Yomiadetunji_cg noted:

“I think @officialABAT needs to call out Buhari's administration on this one. Forget partisan politics.”

@Chibuzo85836523 said:

“The problem is that the majority of Nigeria's Population are yet to accept that Nigeria is in deep financial problem.”

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@efe_wills said:

“We're in trouble, the dire consequences of what Buhari and Emefiele left for Nigerians is now worsened by the challenges of Tinubu's somersaulting policies. We're heading for doom."

@Nnajulianyahoo1 stated:

“Every president should be held accountable for what happened during his tenure. until we start doing that, corruption will not start parking”

@madonnite noted:

"Lies! We are not borrowing enough. Our debt vs GDP ratio is green. All countries borrow, and are in debt, including the US and China. Let's borrow to buy luxury jeeps for our govt officials, repaint Aso Rock, and increase official estacodes. Let's appoint more PAs as a job creation strategy."

@sylvez92 said:

“Simple mathematics in basic economics, so long as your debt is more than your revenue and it keeps going higher, you are going to bankrupt. Borrowing for recurrent expenditures is the deal breaker for me, u can't keep borrowing money to keep drinking beer.....

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Nigeria successfully repays China, India, Germany $1.81bn, services CBN loans with N912bn

New Data from the Central Bank of Nigeria (CBN) has shown that the Nigerian government has allocated a significant $1.81 billion to service foreign debts during the first seven months of 2023, Legit.ng reported.

An analysis of the amount shows that in January 2023, the Nigerian government set aside $112.35 million to service foreign debt.

February saw a higher debt servicing of $288.5 million, while March witnessed a substantial expense of $400.5 million.

Source: Legit.ng