The Federal Government has allocated N6.6 trillion to debt service in the 2023 budget signed by President Muhammadu Buhari on Tuesday at the Presidential Villa in Abuja.
Recall that the 2023 appropriation bill was increased by N1.32 trillion to N21.83 trillion, from the N20.51 trillion proposed by President Buhari.
Details of the signed budget revealed that debt servicing was also increased to N6.6 trillion from N6.31 trillion, as the World Bank complained of its impact on Nigeria’s revenue.
In a report in December, the World Bank said Nigeria and other developing economies have an external debt of $9 trillion in 2021.
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The report showed that Nigeria’s external debt was $18.8 billion in 2010, but rose to $76.2 billion last year. The World Bank said, “About 60% of the poorest countries are already at high risk of debt distress or already in distress.”
It added that, “At the end of 2021, IDA-eligible countries’ debt-service payments on long-term public and publicly guaranteed external debt totaled $46.2 billion—equivalent to 10.3% of their exports of goods and services and 1.8% of their gross national income (GNI), according to the report.”
The World Bank on Monday said about 62 per cent of the Federal Government’s revenue would be gulped by debt owed to the CBN in 2027.
In 2021, the government had borrowed about N6.3 trillion within 10 months from the central bank, raising the CBN loan to FG from N17.5 trillion in December 2021 to N23.7 trillion in October 2022.