Nigeria’s foreign debt servicing costs have risen sharply by 107.7%, reaching N3.8 trillion in just eight months, far exceeding the N1.83 trillion projected in the 2024 budget. This escalation, alongside modest overspending on domestic debt, underscores the growing burden of debt servicing on the nation’s finances, consuming a substantial share of government expenditure. By August, total debt servicing payments stood at N5.51 trillion out of the N7.41 trillion allocated for the year.
While the Federal Government generated N12.74 trillion in retained revenue by August, achieving 73.8% of its annual target, the delayed implementation of a windfall tax contributed to a revenue shortfall. On the positive side, non-oil revenues performed strongly, with Corporate Income Tax and Value Added Tax collections surpassing targets by 74.5% and 55.1%, respectively, and Customs revenues reaching 95% of projections. However, oil revenues fell short due to sector challenges, including price volatility and production constraints.
The fiscal challenges have been compounded by the naira’s depreciation, which has inflated the cost of servicing external debts. As a result, Nigeria’s debt-to-GDP ratio surpassed 50% by March 2024, signaling mounting economic pressures. With public debt continuing to grow and interest payments rising, the report highlights the need for robust fiscal reforms to stabilize the economy.
