The Federal Government of Nigeria exceeded its own debt service allocation by N1.15tn for the period between January and November, 2021.
A copy of the public presentation of the 2022 approved budget by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, showed that the Federal Government allocated a separate funding of N3.32tn for debt servicing in 2021.
In addition, Further investigation showed that from the total of N3.33tn, domestic debt was anticipated to consume 2.18tn, foreign debt N940.98bn, and sinking fund N200bn.
Based on the allocation, the document emphasized that the Federal Government looked forward to spending a total of N3.05tn on debt servicing from January to November of the previous year.
Immense breakdown showed that the government hoped to have spend about N2tn on domestic debt servicing, N862.48bn on foreign debt servicing, and N183.33bn on sinking fund.
However, the minister’s presentation document showed that a total of N4.2tn was spent on debt servicing in 11 months, indicating a difference of N1.15tn or 37.9 per cent of the money allocated for debt servicing for the period.
It furthermore showed that the government spent about N2.2tn on domestic debt servicing, N885.01bn on foreign debt servicing, and N600m on sinking fund.
Although there was no allocation for interest payment , which is the government’s borrowing from the Central Bank of Nigeria, it still spent N1.12tn on the payment of interest. This then gives reason to indicate that the payment of interests was a major contributor to the excess in debt service allocation.
