Nigeria spends N1.1trn, 40% above budget provision on debt servicing in 9 months

The sum of N1.094.22 trillion was spent by the Federal Government on foreign debts servicing, with N1.044 trillion going in for the same reason for local debts as at September 2016.

This represents more than 40 per cent increase from the N980.55 billion as budgeted in the 2016 spending plan.

The disclosure was contained in the 2016 draft on budget implementation and performance monitoring report for the third quarter presented on Tuesday by the Minister of State for Budget and National Planning, Zainab Ahmed, at an event titled “Promoting Effective Policy Monitoring and Evaluating and Performance of Ministers, Department and Agencies in the implementation of the 2016 Budget of Change” in Abuja.

Ahmed said: “The increase in the external debt stock in the third quarter of 2016 was due largely to the rise in Non-Paris Club Bilateral Debts draw down.

“Some other factors, such as the crash of oil prices in the International market, crude oil theft, illegal bunkering and militancy in the oil-rich Niger Delta affected the earnings of the country, she said.

The minister said net oil receipt dropped by 66.6 percent to N2012.37 billion in the third quarter of 2016, against N603.53 billon.

However, non oil revenue improved by 9.47 per cent to N777.37billion from N709.96billion same quarter last year, adding, that in 2016, government largely borrowed from domestic sources to fund capital projects.

Ahmed, however, said a net sum of N987.17 billion was available for distribution among the three tiers of government in the third quarter, with a 30 .96 per cent shortfall of N442.73 billion.

But despite the crash of global oil prices and short supply of the product, no transfers were made to the Excess Crude Account (ECA) in the first two quarters of the year.

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However, a rise in crude oil prices, N145.48billion was transferred to the Federation account in the third quarter.

Ahmed said a total of N85. 17 billion was withdrawn from the ECA for distribution among the three tiers of government within the quarter, leaving a balance of $2.89billion as at September 20.

The 2016 budget had a total appropriation of N6.06trillion with recurrent non debt portfolio.

Officials of Debt Management Office (DMO) confirned that debt servicing has always posed a challenge with some factors, including exchange-rate instability, plus persistent shortfull from oil revenue, all of which mount undue pressure on the office meeting deadlines for various debts servicing as at when due.

 

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