The Federal Government spent N2.02Tn on debt servicing in the first six months of this year. This figure represents 90.58 per cent of the total revenue of N2.23Tn generated by the FG within the period, a development which experts said signified a dangerous trend for the economy. Technical Adviser to the Director General of the Budget Office, Alfred Okon, disclosed the figure while presenting the “Overview of FGN 2022 Budget Call Circular” report.
Okon made the presentation on Thursday at a training on “Government Integrated Financial Management Information System Budget Preparation Subsystem for Ministries, Department and Agencies.” The report stated that as of June 2021, the Federal Government’s retained revenue was N2.23Tn, which is 67.58 per cent of prorata target of N3.3Tn for the review period. This means that the Federal Government failed to realise N1.07Tn of its revenue target in the first half of the year.
The total revenue comprises oil revenue of N492.44Bn, non-oil tax revenue of N778.18Bn, Company Income Tax of N397.02bn, Value Added Tax of N129Bn and Customs collections of N234.02Bn. Other revenues amounted to N922.09Bn, of which independent revenues accounted for N558.13Bn.
Okon noted that the N2.02Tn used to service debt in the first half of this year represented 35 per cent of total expenditure of N5.81Tn. The report said, “On the expenditure side, N5.81Tn (representing 92.4 per cent of the prorated budget) has been spent. This excludes GOEs’ and project-tied debt expenditures; N2.02Tn was for debt service (35% of FGN expenditures); and N1.79Tn for personnel cost, including pensions (30.9 per cent of FGN revenues).”
It stated that as of August, N1.3Tn had been released for capital expenditure, representing 22.3 per cent of total expenditure. In his remarks, the DG, Budget Office, Ben Akabueze, reiterated the government’s commitment to ensuring the timely submission and approval of the 2022 budget. To achieve this, he said the government had already deployed a series of activities including engagements and stakeholder consultations.
Akabueze said, “The current Federal Government is determined to ensure consistent and timely preparation, submission and approval of annual budgets as part of its public financial management reforms, just as we have done for the 2020 and 2021 budgets.