FG plunge over 97% revenue into debt servicing

The federal government reportedly spent 97.5 percent of its January to May 2020 revenue on debt servicing.

This was revealed in a 2021 budget call circular published by the Budget Office, the federal government generated total revenue of N1.62 trillion out of the N2.62 trillion projected for the period.

During this five-month period, N1.58 trillion was spent on debt servicing; representing 97.5 percent of the N1.62 trillion revenue generated.

In June, the International Monetary Fund projected that debt servicing will gulp all of FG’s revenue in 2020.

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According to the document, the federal government spent a total of N3.98 trillion within the five-month period; N1.79 trillion was said to have been released for non-debt recurrent expenditure, including salaries, pensions and overheads.

A total of N378.85 billion was released for capital expenditure during the period.

A breakdown of the revenue generated showed that N701.6 billion was realised as oil revenue while non-oil tax revenues totalled N439.32 billion (65 percent of revised target).

A total of N213.24 billion was generated from companies income tax, N68.09 billion from value-added tax and N158 billion was realised from customs collection.

The 2020 budget had to be revised after crude oil prices fell on the back of a price war between Russia and Saudi Arabia and the COVID-19 pandemic disrupted global supply chains.

Between the January and May period, the federal government incurred a total debt of N2.35 trillion.

The revised N10.8 trillion 2020 budget includes a N4.98 trillion deficit which is to be mainly financed by borrowing.