Nigeria’s debt profile became worse in the first four months of the 2022 as revenue projection was N3.12 trillion but as at April 30, only N1.23 trillion was realized.
Nigeria’s total revenue stood at N1.63 trillion while debt servicing stood at N1.94 trillion, showing a variance of over N300 billion. Whopping N300 billion was used above what Nigeria earned to service debt.
International Monetary Fund had predicted that this sad development will befall Nigeria in 2026 but it had occurred sooner than expected.
Speaking on the matter, Nigeria’s Minister of Finance, Budget and National Planning, Zainab Ahmed, on Thursday warned that urgent action is needed to address the nation’s revenue challenge and expenditure efficiency at both the national and sub-national levels, according to Premium Times.
The report showed that gross oil and gas federation revenue for the first four months of the year was projected at N3.12 trillion but as at April 30, only N1.23 trillion was realized, representing a mere 39% performance.
“Revenue performance is expected to improve in the second half of 2022 as a result of concerted efforts to address the oil theft and pipeline vandalism, the report said. It added that there is also seasonality to some of the non-oil taxes, which means that the nation expects to collect significantly more in the second half of the year.
“The improved revenue collection should also moderate the Debt Service to Revenue ratio, which is currently above our target level,” the report said.
On Thursday, the new report showed that the Nigerian government’s share of oil revenues in Q1 2022 was N285.38 billion (representing 39 percent performance), while non-oil tax revenues totaled N632.56 billion, representing 84 percent. In essence, the government generated N401.8 billion from company income tax (CIT) and value-added tax (VAT) as CIT and VAT collections were N298.83 billion and N102.97 billion, respectively, representing 99 percent and 98 percent of their respective targets.
Customs collections (made up of import duties, excise and fees, as well as federation account special levies) trailed target by N76.77 billion (25.42 percent) while the other revenues amounted to N664.64 billion, of which independent revenue was N394.09 billion.