FG Spent 47% of 2024 Budget Expenditure on Debt Servicing in 9 Months
- Data from the CBN quarterly statistics bulletin has shown that debt servicing gulped almost half of the first nine months' expenditure in 2024
- This is negative growth, as the sum is 57% higher than the sum spent on the same purpose in the previous year
- More data shows that recurrent capital also grew significantly, and the debt-to-revenue ratio worsened
Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
New findings have shown that debt servicing accounted for 47% of the federal government expenditure in the first three quarters of 2024.
This means that out of the N18.97 trillion total expenditure, N8.94 trillion was spent on debts.
This sum was about 57% higher than the N5.69 trillion spent on the same purpose in the first nine months of 2023.
The PUNCH reports that the Central Bank of Nigeria’s quarterly statistics bulletin shows a growing debt burden year on year. Debt servicing took up 42% of GDP in 2023 and grew to 47% in 2024.
Source: Twitter
Debt-to-revenue ratio worsened
Further analysis of the data shows that the debt-to-revenue ratio worsened year-on-year. In 2023, debt servicing at N5.69 trillion was 132% of the government’s retained revenue of N4.32 trillion.
In 2024, it worsened as the N8.94 trillion accounted for 147% of the N6.08tn retained revenue.
This explains the growing fiscal deficit and continued dependence on loans to fund both expenditure and debt servicing.
Recurrent expenditure grew 45%
In the same periods, recurrent expenditures increased from N10.38 trillion in 2023 to N15.11 trillion in 2024, a 45% year-on-year increase.
These include; personnel costs, which increased N2.99 trillion to N3.59 trillion; pensions and gratuities, which reduced from N340 billion in 2023 to N336.6 billion in 2024; debt servicing; and transfers which doubled from N711.36 billion to N1.31 trillion.
Overhead costs also shot up from N589.63billion in 2023 to N892.85billion in 2024
Capital expenditure grew by 21%
Capital expenditures also increased in 2024, but not enough to match recurrent expenditures. From N3.19 trillion in 2023, they reached N3.86 trillion in the 2024 budget.
This indicates that the growing debt burden and recurrent expenditure do not allow the federal government room to increase allocations for capital projects.
The fiscal deficit also grew from N9.25 trillion in the first three quarters of 2023 to N12.89 trillion in 2024, a 39.3% increase.
Experts at Cowry Research predict that debts and related costs will continue to gulp a large portion of government revenue, leaving the naira weaker against foreign currencies.
Experts project FG’s borrowings in 2025
In related news, Legit.ng reported that the Nigerian government may resort to even more borrowings in 2025.
Experts project that the nation's debt profile could increase by more than 13 trillion naira in 2025.
The Afrinvest 2025 Outlook Report reveals that even though the government projected N13 trillion in new borrowings, it would need to exceed that amount significantly.
The borrowings would be expected to bridge the fiscal deficit gap in the 2025 budget.
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Source: Legit.ng
