Finance Minister Laments as Debt Service Costs Rise
Finance Minister
*Says it is dangerous debt service cost now more than actual revenue
By Our Correspondent
The Finance, Budget and National Planning Minister, Mrs. Zainab Ahmed has raised alarm over rising debt service cost as it now overwhelms revenue.
Mrs Ahmed said debt service cost as at the first quarter of the year was N1.94 trillion, an amount that is N310 billion more than the revenue during the quarter.
The minister who spoke on the occasion of the unveiling of the Medium Expenditure and Fiscal Strategy Paper (MTEF-FSP) in Abuja on Thursday said the cost of fuel subsidy is put at N6.72 trillion for the full year, saying this will be a drain to the economy if continued..
She described as dangerous with debt service cost now more than actual revenue received.
Ahmed said, “The aggregate expenditure for 2022 is estimated at N17.32 trillion, with a pro rata spending target of N5.77 trillion at the end of April.
“The actual spending as of April 30th was N4.72 trillion. Of this amount, N1.94 trillion was for debt service, and N1.26 trillion was for personnel costs, including pensions.
“As at April, N773.63 billion had been spent on capital expenditure. As of April 2022, FGN’s retained revenue was only N1.63 trillion, 49 per cent of the pro rata target of N3.32 trillion.”
“The new arrangement has indicated that NNPC will not be contributing monthly to the Federation Account as they used to in the past. But NNPC will be paying royalties, dividends and taxes. So, while the revenue might not be monthly, we will work on an arrangement on how this will be paid. And it is possible to work out an arrangement where the payments could be monthly or quarterly.
“NNPC has been paying for subsidy, but they are doing it on behalf of the federation, on the cost of the federation, even though they are the ones that have been paying.
“So, when they generate revenue, instead of remitting the revenue they are using part of the revenue or all of them to fund the subsidy. That has been the arrangement and that is what will continue to be in place until we exit the first time scenario one”
By Our Correspondent
The Finance, Budget and National Planning Minister, Mrs. Zainab Ahmed has raised alarm over rising debt service cost as it now overwhelms revenue.
Mrs Ahmed said debt service cost as at the first quarter of the year was N1.94 trillion, an amount that is N310 billion more than the revenue during the quarter.
The minister who spoke on the occasion of the unveiling of the Medium Expenditure and Fiscal Strategy Paper (MTEF-FSP) in Abuja on Thursday said the cost of fuel subsidy is put at N6.72 trillion for the full year, saying this will be a drain to the economy if continued..
She described as dangerous with debt service cost now more than actual revenue received.
Ahmed said, “The aggregate expenditure for 2022 is estimated at N17.32 trillion, with a pro rata spending target of N5.77 trillion at the end of April.
“The actual spending as of April 30th was N4.72 trillion. Of this amount, N1.94 trillion was for debt service, and N1.26 trillion was for personnel costs, including pensions.
“As at April, N773.63 billion had been spent on capital expenditure. As of April 2022, FGN’s retained revenue was only N1.63 trillion, 49 per cent of the pro rata target of N3.32 trillion.”
“The new arrangement has indicated that NNPC will not be contributing monthly to the Federation Account as they used to in the past. But NNPC will be paying royalties, dividends and taxes. So, while the revenue might not be monthly, we will work on an arrangement on how this will be paid. And it is possible to work out an arrangement where the payments could be monthly or quarterly.
“NNPC has been paying for subsidy, but they are doing it on behalf of the federation, on the cost of the federation, even though they are the ones that have been paying.
“So, when they generate revenue, instead of remitting the revenue they are using part of the revenue or all of them to fund the subsidy. That has been the arrangement and that is what will continue to be in place until we exit the first time scenario one”
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