N1.25 trillion was spent on debt servicing within 5 months — Ahmed

Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed has on Friday during a virtual consultative session with CSOs, the organised private sector and the general public on the draft 2021 – 2023 Medium Term Expenditure Framework/Fiscal Sustainability Paper (MTEF/FSP), disclosed the nation's current debt stock is around $86bn or over N33trn and counting, and that the Federal Government spent N1.25 trillion between January and May 2020 on debt servicing.


It is worth noting that debt servicing is not the same as debt repayment. Former vice president, Alhaji Atiku Abubakar who has criticized the Buhari administration for dipping the country into huge debt, said, "Debt servicing is not debt repayment. Debt servicing just means that we are paying the barest minimum allowable by our creditors."

Atiku's former boss, Obasanjo, similarly stated that the Nigerian government is using borrowed funds to service borrowed funds.



He said, "Our current budget out of which we are spending 25% to service debt is not our total earning; a lot of it is also borrowing. Simply put, we are borrowing to service what we have borrowed and yet we are borrowing more."

The Finance Minister while giving an update on the initial 2020 budget performance between January and May, said on the expenditure side, N9.97 trillion was appropriated (excluding Government-owned enterprises and Project tied loans), while N3.52 trillion (representing 84.8% of the pro rata N4.16 trillion) was spent.

Of the expenditure, she said N1.25 trillion was for debt service, and N1.32 trillion for personnel cost, including pensions.


Thus as at the end of May 2020, only N253.33 billion had been released for capital expenditure, a situation she attributes largely to the budget revision exercise.

On revenues performance she said as at end of May 2020, FGN’s retained revenue was N1.48 trillion, 56% of target while non-oil tax revenues totalled N439.32bn (65% of revised target).

According to Mrs Ahmed, other revenues amounted to N339.51 billion, of which independent revenues was N80.22 billion (21% of target). Recoveries and Stamp duty collected during the period are yet to be booked in the fiscal accounts.