The Federal Government exceeded its debt service allocation by N1.15 trillion between January and November 2021.
According to a copy of the Minister of Finance, Budget, and National Planning, Mrs Zainab Ahmed’s public presentation of the approved 2022 budget, the Federal Government allocated N3.32 trillion for debt servicing in 2021.
Domestic debt was expected to consume 2.18 trillion naira, foreign debt N940.98 billion naira, and sinking fund N200 billion naira of the total of N3.33 trillion naira of the total of N3.33 trillion naira of the total of N3.33 trillion naira of the total of N3.33 trillion naira of the total of N3.33 trillion naira The document also stated that the Federal Government hoped to spend a total of N3.05tn on debt servicing from January to November 2021, based on the allocation.
It hoped to spend about N2 trillion on domestic debt servicing, N862.48 billion on foreign debt servicing, and N183.33 billion on sinking fund.
However, according to the minister’s presentation document, a total of N4.2tn was spent on debt servicing in 11 months, representing a difference of N1.15tn or 37.9% of the money allocated for debt servicing during the period.
The government spent approximately N2.2 trillion on domestic debt servicing, N885.01 billion on foreign debt servicing, and N600 million on sinking fund.
Despite the fact that there was no budget for interest payments on Ways and Means, the government’s borrowing from the Central Bank of Nigeria, the government spent N1.12 trillion on interest payments. This then fuels speculation that the payment of Ways and Means interest was a significant contributor to the excess in debt service allocation.
According to Brandspurng, the Federal Government’s excessive borrowing from the CBN through the Means and Ways Advances window could have a negative impact on the apex bank’s monetary policy, harming domestic prices and exchange rates.