The Nigerian government spent about $11.35 million on external debt servicing in January 2023.
Data from the Central Bank of Nigeria’s Weekly International Payments showed that the amount spent in January was 146.17 per cent higher than the $45.64m spent in December 2022.
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This occurred as the Federal Government struggled to boost its revenue base despite its revenue generation efforts.
It was reported that the Federation Account Allocation Committee shared N750.17bn among the three tiers of government in January 2023.
The figure represents a decrease of N240.02bn compared to the N990.19bn shared in December 2022.
In 2022, Nigeria spent $2.4bn to service its external debt, which was a slight increase from the $2.11bn spent in 2021.
Also, reports say that the Federal Government deducted over N78bn from allocations made to the states for external debt servicing.
This was according to data from the Federation Account Allocation Committee Disbursement reports published by the National Bureau of Statistics.
The deductions were made in 2022 from the allocations given to state governments from the Federation Account.
The federation account is currently being managed under a legal framework that allows funds to be shared under three major components: statutory allocation, Value Added Tax distribution and derivation principle.
According to Punch, most hit state by the deductions was Lagos, with about N23.61bn deducted in 2022 for external debt servicing.
It was followed by Kaduna, with N10.25bn deducted, and Cross River with N7.56bn deducted.
The International Monetary Fund recently said the Federal Government projected to spend 82 per cent of its revenue on interest payments in 2023.
According to the IMF, external debt (including that of the private sector) will rise to $121.6bn, with external reserves climbing to $37.5bn.
