The federal government expended N5.78 trillion on debt servicing during the first nine months of 2023, according to a report from the budget office of the federation.
In its 2023 third quarter (Q3) budget implementation report released on Monday, the budget office disclosed that this expenditure exceeded the prorated projection of N4.91 trillion for 2023, marking an increase of N869.38 billion (17.68 percent).
Interest on ways and means for the period amounted to N1.69 trillion. The office detailed that N2,901.60 billion was allocated for domestic debt servicing, which is N430.27 billion (17.41 percent) above the prorated projection for the period, while N1,189.32 billion was used for external debt servicing.
Additionally, N1,225.73 trillion was released and cash-backed for MDAs’ 2023 capital projects and programs during this time. Out of this, N962.84 billion (78.56 percent) was utilized by MDAs as of September 30, 2023.
The budget office reported a fiscal deficit of N4.4 trillion between Q1 and Q3 of last year, which is N4.29 trillion (49.32 percent) less than the projected N8.7 trillion deficit for the same period last year. However, this figure was lower than the N5,991.12 billion deficit recorded in the corresponding period of 2022.
The deficit was financed through domestic borrowing of N3,430.0 billion, resulting in a negative net financing of N979.49 billion for the period.
The budget office also noted that Nigeria’s economy grew by 2.54 percent in Q3 2023, indicating a continued recovery from the second recession in six years. The positive growth was attributed to measures implemented to mitigate the adverse effects of external shocks and crude oil theft, the recent rise in global economic activities, increased international demand and price for crude oil, and various government incentive packages.
The budget office anticipates that this positive trend will persist into the last quarter of 2023 and beyond.
