Nigerian Government Spends N5.78 Trillion on Debt Servicing in First Nine Months of 2023
The Budget Office of the Federation has revealed that the Nigerian government spent N5.78 trillion on debt servicing in the first nine months of 2023. This expenditure surpasses the prorated projection of N4.91 trillion in the 2023 budget, representing an increase of N869.38 billion or 17.68 percent.
In its 2023 third quarter (Q3) budget implementation report, released on Monday, the office disclosed that interest on ways and means during the period amounted to N1.69 trillion. Additionally, N2.9 trillion was allocated for domestic debt servicing, exceeding the prorated projection by N430.27 billion (17.41 percent), while N1.19 trillion was spent on external debt servicing.
The report also highlighted that N1.23 trillion was released and cash-backed to MDAs (Ministries, Departments, and Agencies) for their 2023 capital projects and programs during the period. Of this amount, N962.84 billion (78.56 percent) was utilized by MDAs as of September 30, 2023.
The revenue and expenditure outturn resulted in a fiscal deficit of N4.4 trillion between Q1 and Q3 of 2023, which is N4.29 trillion (49.32 percent) below the projected N8.7 trillion deficit for the period. However, this figure is lower than the N5.99 trillion deficit recorded in the corresponding period of 2022. The deficit was primarily financed through domestic borrowing of N3.43 trillion, reflecting a negative net financing of N979.49 billion during the review period.
The report also noted that Nigeria's economy grew by 2.54 percent in Q3 2023, indicating continued recovery from the nation's second recession in six years. The positive growth was attributed to measures implemented to mitigate the impact of external shocks and crude oil theft, as well as a rise in global economic activities, increased international crude oil demand and prices, and various government incentive packages.
The Budget Office expects this positive economic trend to persist into the last quarter of 2023 and beyond.
