Big Debt Crisis As Nigeria Government Borrowed N845b To Pay Salaries

0
Big Debt Crisis As Nigeria Government Borrowed N845b To Pay Salaries
[FILE PHOTO] Finance Minister, Zainab Shamsuna Ahmed

Big Debt Crisis As Nigeria Government Borrowed N845b To Pay Salaries

The nation’s fiscal crisis may not have been overstated after all, as government paid about N844.88 billion in salaries and offset debt-related obligations that were due in the course of implementing the 2017 budget from borrowed funds.

The analysis of the Budget Implementation Report for 2017 showed that government’s personnel and debt expenditures, which stood at about N3.5 trillion exceeded its overall revenue of about N2.65 trillion.

While several ministers of finance had justified borrowing through infrastructure investments, the current one, Mrs. Zainab Ahmed, said government was also trying to raise a new Eurobond, which would be used to fund capital projects.

An analysis of the Budget Implementation Report for 2017 showed that out of the projected Federal Government’s retained revenue of N5.084 trillion, only N2.38 trillion was realised, representing 46.75 per cent of the projected revenue, with a variance of 53 per cent.


  • I am sure You are transform by the information you  get through me, I am also sure you can be part of our daily updates. why not leave your email behind let me keep you informed with information, jobs and inspire  you always.


Also check:Senate Warns Buhari On Debt Trap, Okays $2.9b Loan

When other non-budgeted revenue heads such as refund from the Nigerian National Petroleum Corporation, exchange rate differential, among others, were added, it rose to N2.66 trillion, representing 52.27 per cent of the budgeted revenue and a variance of about 48 per cent.

But government’s expenditure, according to the report, showed that personnel had a projection of N1.88 trillion, while the actual figure was N1.87 trillion, being 99 per cent performance.

This excludes other peripheral debt items, which bloated the figure. Consequently, the combination of personnel expenditure and debt repayment at about N3.5 trillion, which exceeds the realised overall revenue, created N844.88 billion that was financed by debt proceeds.

The Programme Officer, Public Finance Management, Fidelis Onyjegbu, said the development was a clear indication that the country borrowed to the tune of N844.88 billion to pay salaries and debts, which is contrary to the terms of the borrowings.

“It also means that 68.62 per cent of all our revenue was used to pay debts, while the overall recurrent expenditure is higher than government’s accrued revenue,” he said.

The Lead Director at the Centre for Social Justice, Eze Onyekpere, said the performance leaves more questions than answers. “Why did oil revenue underperform at a time of high oil prices, without reported cases of militancy leading to disruptions in oil production? The composite BIR for the year states that ‘the average price of crude oil in the international market also represents an increase of $9.77 per barrel (or 21.96 per cent) above the US$44.5 per barrel oil price benchmark for the 2017 budget.’

“The implication was that oil sold above the benchmark price in the international market. So, what is going on in the oil sector that we have not been told? Is it subsidy without appropriation, which is illegal and an assault on the constitution or mismanagement and fraud? Nigerians need to know. Again, oil revenue still comes top despite all the mantra of diversification of the economy,” he said.

A further breakdown of non-oil revenue showed that the key subheads like value added tax, company income tax, customs and excise and independent revenue, underperformed.

For example, the expectation from VAT was N241.92 billion, while the sum of N130.05 billion was realised, being a 53.75 per cent performance; company income tax was projected at N807.82 billion, while N543.34 billion was realised, being 67.26 per cent performance.

Except customs and excise that hit 95.26 per cent performance, the independent revenue projection joined others and remained the perennial under-performer, with N295.29 billion, being a performance of 36.5 per cent, out of N807.57 billion expected.

While some infrastructure projects and foreign direct investments will take a longer term to mature or impact positively as part of diversification, there are some agitations over the implementations of the borrowed funds.

For the coordinator of the Nigeria Network of Non-State Actors, Prince Chris Azor, the country is now on a borrowing auto mode and concern is heightened about the investment of the proceeds.

“There are issues on the ground and a lot that government is not telling the citizens. First, the country’s credit worthiness is fast eroding with the revenue crisis and falling reserves. The 2019 budget proposal is a pointer. The fall in the proposal is tactical denial of credit worthiness. We have just lost more in the ease of doing business. So, we cannot stop borrowing as it is now and the borrowed ones are not well prioritised,” he said.

Advertisements
SHARE